Bitcoin operates as peer-to-peer network. This means that everyone who uses Bitcoin acts as a tiny fraction of a whole bank of bitcoin. But an important question arises is where does Bitcoin come from? With paper money its government who decides the printing, when and in how much quantity. However BTC doesn’t have any central government.
A certain number of Bitcoins are issued to those who solve some math problems using various software. These people are called miners. And they receive BTC in return of their effort. This provides a smart way to issue the currency and inturn gives motivation to other miners to mine. And as miners are require to verify each transaction more miners means a more secure network.
The speed with which a problem is solved would be the base on which the bitcoin network would automatically change the difficulty level of the math problems.
Mining started with processors and computers then moving on to graphics card used for gaming has reached to ASIC (Application Specific Integrated Circuit chips). ASIC has made mining technology even faster and has a lesser power consumption.
Bitcoin Mining basically is a procedure to add transaction records into the public account of earlier transactions. This account of records is called “block chain”. In simple words we can call it chain of blocks. When a transaction takes place this block chain serves as a medium to verify to the other networks about that particular transaction.
The block chain is used by the BTC nodes to differentiate the responding of the coins that have earlier been used from the ones which are actually legal to be spent.
It is a delebrate effort to keep the process difficult and resource-intensive in order to keep the number of blocks balanced, which are mined my miners everyday. Blocks are considered valid only when a proof of certain work is attached to it. Every time when a block is received the other Bitcoin nodes are supposed to prove this work of proof. Hash cash Proof-of-work function is utilized by BTC.