Bitcoin Mining

Bitcoin mining does two things: it creates newly minted Bitcoins, and it processes Bitcoin transactions.

Bitcoin mining takes a lot of energy. A recent study says that Bitcoin mining is using as much energy as Ireland uses, and that Bitcoin’s energy use is doubling every six months. Maybe that makes “mining” kind of ironic since it takes up so much energy, whereas old fashioned coal mining was used to harvest energy.

Why the mining? Mining Bitcoin is using immense computer power to crack a code, or solve a puzzle. When the puzzle is solved, you get a block reward, or a block (a.k.a. Bitcoin cash money). Everytime someone mines a block, the next one is worth less. That means the cost of mining each Bitcoin goes up over time as more Bitcoin is mined. Think of your classic supply and demand chart, you economist you.

What do you need to mine? Internet and some intense mining hardware that can handle cracking the code. You can also basically lease the hardware through the cloud if you want to participate without getting your hands too dirty mining.