What is Bitcoin Mining?
I'll try to make this as simple as possible.
Bitcoin mining is a decentralized process that has two purposes:
- Confirm transactions between everyone on the network by solving computations or algorithms.
- Create new bitcoins as a reward for confirming transactions
Why is this important? Instead of letting the government control the money supply, no one controls it.
This is the perfect design to issue the currency and also creates an incentive for more people to mine.
Now you're probably wondering how it's possible that even you can mine. Answer, it's actually really easy.
It's called Cloud Mining.
There are two ways to cloud mine:
- You can join a cloud mining pool and receive coins in return for your mining contribution. The best tool I've found and personally use is MinerGate.
- You can buy a contract for hashrates. The easy way to describe this is you pay someone else to mine for you. You buy a contract and you receive the amount in Bitcoin that was mined. You can do this with MinerGate, but I use Bitcoin Mining Pool.
If this still doesn't make sense, the video below provides a great explanation.