There’s a chance that you have heard of the word “Bitcoin Mining”. This may even make you wonder what is it actually in the first place and how such two-phrase term can make you rich?
How Cryptocurrencies are Obtained?
Well basically, the outcome for mining is twofold; first of all, when computers are capable of solving complex mathematical problems on Bitcoin network, it is capable of producing new Bitcoin. When compared to “mining” on the other hand, it is extracting gold from ground.
Secondly, by means of solving these mathematical problems, Bitcoin miners are able to make Bitcoin payment network more secure and trustworthy by means of verifying transaction information.
To explain how it works, we need to look closer on this subject, which is the regulation of the printed currency.
When bitcoin miners are adding new block of transactions to blockchain, a part of their job is ensuring that these transactions are 100 percent accurate. Particularly, miners are ensuring that the bitcoin isn’t being duplicated, which is basically a quirk unique to digital currencies. This is also known as “double-spending”.
Cryptocurrency and Fiat Currency
Using printed currencies, duplicates in money are not an issue. After spending 10 bucks at a store, that bill is already in the clerk’s hands, but things are different when it comes to digital currency. It will require encryption and decryption process to get the coin and to reuse it for other purpose.