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What Exactly is Bitcoin Mining?

Mining in bitcoin is a process of validating transactions. For every block of transaction that is completed and validated the miner is paid a transaction fee and rewarded. It is somewhat opposite of how a government controls their national currencies. Bitcoin does not have a centralised authority. Rather, the work is spread across a network and the miners work by connecting to the network. All the work for bitcoin is done by the miners.

Miners collect the transactions on the network and create bundles called as blocks. The blocks are interlinked and a controlled authority called as block chain is created. It controls and rejects any conflicting deals i.e. if a user tries to cheat by using a bitcoin that is already spent, it will reject the transaction. It is something like a cheque bouncing or you issuing cheques for values of more than what you have in your bank.

The miner should be very careful while validating a transaction and is required to check if the request has come from a valid ID. The miners are rewarded with bitcoins once the block is successfully completed. They also are paid a transaction fee. They faster you finish the more you earn.

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