Most of you probably think: Mining Bitcoins means creating new coins, right?
But that's not really correct! Let me tell you what it really means...
Mining is the process of "Proof of work".
This proof is nothing more than the proof, that a certain requested work was successful.
So you think maybe - proof of work = the proof of creating new bitcoins. WRONG:
It is that every Miner trys to find a block.
How? By solving very complex mathematical functions - the Hashing Algorithm.
They try to find out the one and only hash that belongs to this one and only block (every hash is unique of course) - they are in a competition.
Finally - the first one that wins by finding the block solved the mathematical task and gave the proof of work.
As reward the miner will get some bitcoins.
Did you now the real process of mining? Let me know in the comments below!
xoxo cryptoleen
The miners actually are participating in the creation of new bitcoins. The reward that they receive are the new bitcoins that are entering the ecosystem. There are halving events in which the reward is cut in half. This is how the inflation rate is set in place.
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