What Is Mining?
Mining is the method of adding transaction documents to Bitcoin’s government bundle of previous transactions (and a ‘ mining rig ‘ is a colloquial metaphor for a single computer system that conducts the required computations for ‘ mining. ‘ This bundle of previous transactions is called the block chain as it is a chain of blocks.
Proof Of Work
Mining is intended to be resource-intensive and challenging so that the amount of blocks discovered by miners every day stays constant. Individual blocks must contain a valid ‘proof of work’. This ‘proof of work‘ is checked every time they receive a block by other Bitcoin nodes. Bitcoin utilizes the proof-of-work feature of the hashcash.
As more and more miners competed for the restricted supply of blocks, people discovered they worked for months without finding a block and getting any prize for their efforts in mining. This created a gamble on mining. To tackle the variance in their miners’ revenue, they began to organize themselves into mining pools in order to share benefits more uniformly.