For new Bitcoiners the concept of mining can be confusing to wrap your head around. While thoroughly intricate and highly technical, the means and techniques by which this currency is obtained is a very important process to understand. The following should help tone down the technical and having bitcoin mining explained thoroughly will ensure you properly grasp this process.

An important thing to note is the purpose of mining; mining allows bitcoins to be distributed without a centralized authority. Mining works by adding records of transactions to a public ledger. This ledger is called a block chain. The block chain’s sole purpose is transaction confirmation. This action helps ensure that bitcoins can only be spent once, and not fraudulently.

Next, you should understand what a hash function is. A hash function is any formula that maps random data to systematic data. Then it’s trial and error until you find the number you’re looking for. You must also prove your work. By using the hashcash proof-of-work function, all the work of miners is checked out to secure validity. The work of miners, by design, is complex and intensive. It takes an average of 10 minutes to find the solution. This helps to keep the number of blocks found each day consistently steady. Miners are paid per transaction and also a chunk of the newly created currency.

The difficulty surrounding this system has been briefly touched on. To further your knowledge and have Bitcoins explained, knowing how the difficulty is measured and judged will be beneficial. By comparing how difficult it is to find a new block to the easiest it has ever been, the difficulty is measured. As mentioned above, 10 minutes is the average time it takes to complete a block. Every 2016 blocks, the system will recalculate. If the average time is 10 minutes per block, this will work out to be two weeks, thus ensuring that everyone is mining at this difficulty. However, if the completion of the 2016 blocks falls before or after 2 weeks, the difficulty will rise or fall to compensate the difference.

In short, miners use a very special software to solve complex math problems, and in exchange are issued a certain number of bitcoins. There are many different options available to you. Those include:

CPU miningWhile this option is still available, it has seemed to be phased out due to cost reasons.
GPU miningFast and efficient.
FPGA MiningConsume small amounts of power with high ratings, slightly more efficient than GPU.

There are a few more options available to you as well. The Bitcoin network is a peer-to-peer payment system, and mining can be a competitive undertaking. Bitcoins were designed to be the perfect digital currency. The source code is easily assessable to the public and is a testament of its security. Miners are the glue that holds it the numbers in place.