In laymen’s term, Mining bitcoin is keeping some kind of ledger of the transactions happening through some medium. To maintain these ledgers, you need to run software on your machines.
For example, If you do any sort of business in which you write each and every transaction on some notepad. Now suppose you moved to digital world in which you keep log of each and every transaction in your PC. Now you are so busy in growing your business that you don’t get time for logging each and every transaction, So you hire an accountant who keep log of transactions happening in your business. As you hired someone to do this task, You pay him for his service, ain’t you?
As a Fact that there is always someone to replace you, there comes an accountant who does that logging of transaction in lesser time than the former one, and this propagate to a level that now you have 100 accountants to keep the log of transactions. So to make everyone happy, you decide to pay everyone on the basis of transaction he does but with a condition that whosoever logs the transaction first will be paid. So these accountant keep on increasing there speed to log the transactions in order to get paid more.
At some point in time, suppose this logging of transactions reached to a level that every one of the accountant is logging in equal time. So you come up with an Idea that you started giving some problem with certain level of difficulty to solve to each one of them. Whosoever solves that problem first, his transaction gets logged. So to keep it interesting, you increase difficulty of the problem with every transaction logged. As time passes, difficulty reaches to that level that it takes you need to upgrade the level of accountants too.Now there arises the problem, how to keep all the logs at one place as different transactions are getting logged by different different accountant, so you come with a plan, The one who logs the transaction first, will distribute the copy of that transaction to everyone.
This way if you review anyone’s ledger, that ledger will contain all the transaction happened till that time and you won’t lose detail of any transaction.
Lets move to Cryptoworld form normal digital world.
In terms of Cryptoworld (Bitcoin):
- You are the Network
- That accountant you hired is Miner
- Skill of that accountant is Hardware/ASICs (Rig)
- Ledger you used, is blockchain digital ledger
- Upgrade of skill is Hash rate
- Whatever you paid to accountant for his service is that heavenly thing which we all love Bitcoin
CryptotradingFinance 