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I constantly hear the term "mining" used in relation to bitcoin. What exactly is mining? I haven't been able to figure it out.
Hi there,
Bitcoin mining is the process of solving the complex mathematical problems which must be solved in order to create a new block and add it to a blockchain. This is accomplished by running a special program on a computer which uses hardware with high computing capacity, and may also require effort on the part of the miner. When blocks are created, the system generates new units of currency to compensate the "miner".
The more widely used a cryptocurrency becomes, the larger and more complex the mathematical problems involved become. While less popular cryptocurrencies can still be mined on realtively simple equipment, popular cryptocurrencies like bicoin require more processing power than the average home-based user can provide.
Best regards from Moneyguru
