What is bitcoin mining and how does it work?

Bitcoin miners use powerful computers to complete complex mathematical functions called hashes. In addition to verifying transactions in a trusted, decentralized manner, Bitcoin mining also creates new Bitcoins to add to those already in circulation.

Who can mine bitcoins?

While anyone can technically mine Bitcoins, most Bitcoin mining is done by companies running large-scale commercial mining setups featuring data centers with specialized servers. These mining farms are often built near affordable energy sources, such as hydroelectric dams, oil and gas wells or solar energy farms.

How do bitcoin miners get rewarded?

For their work, miners are rewarded with newly created Bitcoins. The authors were able to identify individual miners by tracking the distribution of mining rewards from the largest 16 mining pools to the miners that work for them. Having miners concentrated in one specific country can easily create volatility.

Which bitcoin mining software is best?

While new bitcoin mining software is being developed every year, only a handful grabbed our attention due to their reputation, features, and ease of use. At the top of our list is CGMiner, which we chose as the best overall since its open-source platform can be used on any computer and practically any mining rig.