What is bitcoin mining and how does it work?

Bitcoin mining is the process of verifying, storing and securing Bitcoin transactions. Of course, there is much more to it than that. Before going into more about what is Bitcoin mining and how it works, though, keep in mind these two important things about Bitcoin itself: Don't miss this limited-time deal that's only available for our readers.

Who are bitcoin miners?

The people who mine Bitcoin are known as Bitcoin miners. Well, I say " people ", but really, they are computers that are operated by people. These computers ( which we call "nodes") have to be very powerful, as Bitcoin mining uses a lot of computer power.

What is a bitcoin mining puzzle?

Though it is often referred to as complex, the mining puzzle is actually fairly simple and can be described as guesswork. The miners in Bitcoin's network try to come up with a 64-digit hexadecimal number, called a hash, that is less than or equal to a target hash in SHA256, Bitcoin's PoW algorithm.

How much does a bitcoin mining machine cost?

Application-specific integrated chip (ASIC) systems, which are customized machines for bitcoin mining, are the main infrastructure investment for bitcoin miners. The price range for such machines can range anywhere from $4,000 to $12,000. Even with such high costs, a single ASIC-equipped system generates less than a single bitcoin.