What is Bitcoin Mining?
We aim to explain bitcoin mining to a non technical person
It’s a good idea to explain the blockchain technology first. then, continue with the mining process.
1. You have one single block (a block is like a page of an account book). This is where people can send money to each other and those transactions will be recorded for ever and ever on that page in a way that is unchangeable.
2. These pages are linked together in a chain of pages (like links of a necklace). That is the blockchain.
3. Miners are like people who check if all transactions do make sense and they record those transactions on these blocks for ever and ever. So no one can go back and change them by making new blocks.
4. The miners are rewarded for this job with a little bit of money after solving a difficult math problem. That is why we call it mining: like gold miners who find gold or oil miners who find oil, bitcoin miners find bitcoins (or fractions of them called Satoshis).
5. But they can only mine bitcoins on a very specific schedule: every 10 minutes 12.5 new blocks will be mined (or created) and with that number of pages added to the blockchain. There is no other way of adding new pages or getting more bitcoins on the system, so they are very valuable.
6. If you want to rent one of those miners for mining your own bitcoins you also have to pay them.
7. The miners can choose which transactions they want to add on a page depending of many criteria like: what’s the fee that people paid for making that transaction.
8. This is why it’s so slow and expensive to send Bitcoin (BTC) from one wallet to another. You will have to pay a fee to the miners for them adding your transaction on one of these pages. They only do it if there is a reward for them: some BTC (or Satoshis).
9. So in the end all transactions are grouped by miners choosing according to this method or that method (depending always on the fee that was paid), and then they are added on those pages in a way that can’t be changed anymore.
10. You can also choose which of these miners you want to include your transaction or no. So it’s very cool because you have some power as well compared with banks where they pick all transactions but you don’t have any power.
11. And also every bitcoin has a history so you can trace them like in an account book, from where they came, to who owns them now, etc.
That’s it! That is the blockchain and mining explained to a non-technical person. easier than i thought?