What is Mining?
Mining, in the context of blockchain technology, is the process of adding transactions to the large distributed public ledger of existing transactions, known as the blockchain. The term is best known for its association with bitcoin, though other technologies using the blockchain employ mining. Bitcoin mining rewards people who run mining operations with more bitcoins.
What Does Mining Mean?
Blockchain mining involves adding transactions to the existing blockchain ledger of transactions distributed among all users of a blockchain. While mining is mostly associated with bitcoin, other technologies using a blockchain employ mining as well. Mining involves creating a hash of a block of transactions that cannot be easily forged, protecting the integrity of the entire blockchain without the need for a central system.
Mining is typically done on a dedicated computer, as it requires a fast CPU, as well as higher electricity usage and more heat generated than typical computer operations. The main incentive for mining is that users who choose to use a computer for mining are rewarded for doing so. In the case of bitcoin, it is 25 bitcoins per hash. That is why some hackers use machines they break into to mine bitcoins, getting an unwitting victim to pay for the costs of mining while reaping none of the benefits.