How does Bitcoin make money?
Categories: Bitcoin
New Bitcoins are created as part of the Bitcoin mining process, in which they are offered as a lucrative reward to people who 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 ever-growing "chain," which has a complete, public and permanent record of every Bitcoin transaction.
Miners are 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."
How do I start mining Bitcoin?
As Bitcoin has grown 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.
If you’re interested in getting started, a first step would be to research some popular mining pools and what they require.