What is Bitcoin mining?Does it mean I can generatefree Bitcoin from my computer?Is it still profitable tomine Bitcoin these days?Well, stick around...Here on The VIP Show,I’ll answer these questions and more.Bitcoin was created asa decentralized alternativeto the banking system.This means that the systemcan operate and transfer fundsfrom one account to the otherwithout any central authority.With a central authority,transfering money is easy:Just tell the bank you want to remove$50 from your accountand add it to someone else’s account.In this case,the bank has all the power,since the bank is the only onewho is allowed to update the ledgerthat holds the balances ofeveryone in the system.But how do you create a systemthat has a decentralized ledger?How do you give someonethe ability to update the ledgerwithout giving them so much powerthat they will become corruptor negligent in their work?Well, the rules of the Bitcoin system,known as the protocolsolves this in a very creative wayI like to call“Who Wants to Be a Banker?”In short,anyone who wants to participate inupdating the ledger of Bitcoin transactions,known as the blockchain, can do so.All you need to do isguess a random number that solvesan equation generated by the system.Sounds simple, right?Of course this guessingis all done by your computer.The more powerful of a computer you have,the more guesses you can make per second,this increasing your chances ofwinning this game.If you managed to guess right -you earn Bitcoins and get to writethe “next page” of Bitcoin transactionson the blockchain.Here’s a more detailed breakdown ofthe mining process:Once your mining computercomes up with the right guess,your mining program determineswhich of the currently pending transactionswill be grouped together intothe next block of transactions.Compiling this blockrepresents your moment of gloryas you have now becomethe temporary banker of Bitcoinwho gets to updatethe Bitcoin transaction ledgerknown as the blockchain.The block you’ve created,along with your solutionis sent to the whole networkso other computers can validate it.Each computer that validates your solutionupdates its copy ofthe Bitcoin transaction ledgerwith the transactions thatyou chose to include in the next block.As you can imagine,since mining is based ona form of guessing;for each block,a different miner will guess the numberand be granted the right toupdate the blockchain.Of course the miners withmore computing powerwill succeed more often,but due to the laws ofstatistical probability,it is highly unlikely thatthe same miner will do so every time.After this stage is complete,the system generatesa fixed amount of Bitcoinsand rewards them to youas a compensation for the time and energyyou spent in solving the math problem.Additionally, you get paidany transaction feesthat were attached to the transactionsyou inserted into this block.So that’s Bitcoin mining in a nutshell.--- Send in a voice message: https://anchor.fm/yours-cube/message Hosted on Acast. See acast.com/privacy for more information.