How does Bitcoin make money

bitcoin

Want to know How does Bitcoin make money? New Bitcoins are being created as part of the ongoing Bitcoin mining process, in which they are offered as a lucrative reward to people who choose to operate computer systems that help to validate transactions.

Bitcoin miners, also known as "nodes", are the owners of high-speed computers which independently confirm each transaction, and add a completed "block" of transactions to the growing "chain," which has a complete, public and permanent record of each and every Bitcoin transaction.

Miners are then paid in Bitcoin for their efforts, which incentivizes the decentralized network to independently verify each transaction. This independent network of miners also decreases the chance for fraud or false information to be recorded, as the majority of miners need to confirm the authenticity of each block of data before it's added to the blockchain, in a process known as "proof of work."

As Bitcoin continues to  in popularity and value, competition for the rewards offered by mining has grown steeper. Most miners now use specialized computers designed just for that purpose. This equipment uses a huge amount of energy, a cost that can be another barrier to entry.

All of this means Bitcoin mining is a difficult proposition for a beginner, though some smaller operators choose to join mining pools in which they combine their computing power with others in an attempt to compete for rewards.

Category: Bitcoin