Why is bitcoin mining needed?

Bitcoin mining is an essential component of the network's system for arriving at consensus as to the current state of the ledger. It is central to enabling people to securely make Bitcoin transactions. The Bitcoin network is a globally distributed public ledger consisting of a giant list of timestamped transactions.

What is a bitcoin miner?

The bitcoin miner is the person who solves mathematical puzzles (also called proof of work) to validate the transaction. Anyone with mining hardware and computing power can take part in this. Numerous miners take part simultaneously to solve the complex mathematical puzzle, the one who solves it first, wins 6.25 bitcoin as a part of the reward.

How does bitcoin work?

Every transaction is recorded in an unchangeable blockchain that is copied to every mining machine. Bitcoin doesn’t rely on a central bank to keep records, it’s the miners themselves that keep the records, and they get to keep a share of the transaction fees as well.

How much does it cost to mine bitcoin?

Bitcoin miners are currently mining around $20 million worth of Bitcoin per day. That's $600 million per month. A mining machine costs $2,000-$20,000, making it difficult for anyone but professional miners to mine. Mining is the backbone of all proof-of-work blockchains and can be described with three key concepts: