What is Bitcoin mining?

Mining is the backbone of the Bitcoin network, Miners provide security and confirm Bitcoin transactions. Mining is done by specialized hardware. The role of miners is to secure new transactions (or blocks) to the chain and keeping them in the queue. Miners achieve this by solving a computational math problem which gets increasingly harder to solve. The more computers there are mining on the network, the more difficult, secure and decentralized the network becomes. This service rewards miners with newly-created Bitcoins and transaction fees. It also provides a way to distribute the currency without a central authority and also gives people an incentive to mine.

The Bitcoin block reward supply is controlled by design and is agreed by everyone in the network. The protocol is designed to create new Bitcoins every ten minutes and to reduce the mining reward in half every four years. To prevent inflation the total supply to ever be created is capped at 21 million bitcoins. The last Bitcoin will be mined in 2140.

When Bitcoin first came out it was possible to mine blocks with a simple home computer, as more computers joined the network, the difficulty for solving blocks increased, and miners had to find more efficient ways to participate. Soon miners discovered that they could use graphic cards on the computer and eventually companies invented specialized mining machines.

These machines are designed for a single purpose, and they are called application-specific integrated circuits or simply (ASICS). These machines are extremely powerful at what they are designed to do, which is to generate random hashes as quickly as possible. Since the creation of ASICS, Bitcoin mining has become highly industrialized and is no longer an available business for the average joe.