What Is Bitcoin Mining?
Mining in Bitcoin refers to validating and recording transactions on its blockchain. This computational process, carried out by powerful specialized hardware, both confirms transactions and introduces new bitcoins into circulation. At its core, Bitcoin mining serves three primary functions:
- It confirms transactions by bundling them into blocks and adding these to the blockchain.
- It secures the network by requiring significant computational work, deterring malicious attacks.
- It systematically releases new bitcoins to miners as rewards, following a predetermined schedule.
Over time, this reward decreases in an event known as "halving," ensuring that only 21 million bitcoins will ever exist.