What is Bitcoin Mining? Simple Overview Of What Bitcoin Mining

This is a simple overview of what Bitcoin mining is. In the future I will post further technical details for those with deeper computer knowledge and programming experience.

The Yukon Gold Rush began in 1896, where tens of thousands of people attempted the journey to the Klondike region in hopes to strike it rich with gold.

Bitcoin mining

The Bitcoin gold rush is similar, except instead of racing to a physical geographic region to discover the precious metal, hopefuls today are racing to mine a finite amount of cybercurrency using computer software.

Bitcoin was developed to include a total of 21 million total Bitcoins in circulation globally. As of today, there are just over 11 million Bitcoins in circulation.

Bitcoin was designed with mathematical algorithms that allow precise, predictable amounts to be discovered or minted in set increments over time.

Bitcoin (BTC) is not a fiat currency, which is any national currency with inherent value by government laws and regulations. The U.S. dollar was formerly backed by physical gold until 1971 when Nixon, um, nixed it.

Bitcoin mining is the process of using computer power to solve mathematical problems. When the problems are solved, the Bitcoin miners are rewarded with Bitcoins.

FILE PHOTO: Bitcoin mining computers are pictured in Bitmain's mining farm near Keflavik

Anyone can download the Bitcoin mining software and mine for BTC. Many people today claim that because of fierce competition and Bitcoin mining supercomputers, the individual Bitcoin miner has little chance of discovering Bitcoins and making any money.

Serious Bitcoin miners have turned to pool mining, which basically means joining a team of miners, combining or pooling their computer power, and then distributing any newly minted Bitcoins to all pool members.

Bitcoins are currently released in blocks of 25, so in theory, when a fresh block of Bitcoins is minted, using the current BTC value, a pool of miners would receive about $2500 CAD to distribute between members.

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