Bitcoin mining is the process of verifying and adding transaction records to the public ledger (blockchain). This ledger of past transactions is called the block chain as it is a chain of blocks.
The block chain serves to confirm transactions to the rest of the network as having taken place. Bitcoin nodes use the block chain to differentiate legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.
Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a “subsidy” of newly created coins. This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system through mining.
Does bitcoin mining actually pay? In short, yes. However, there are a number of factors that can affect how much you ultimately earn.
The biggest factor is how much money you are willing to spend on hardware and electricity. If you’re not willing to invest a lot of money upfront, your earnings will be lower.
Another factor is where you live. Some countries have cheaper electricity than others.
For example, electricity in China is much cheaper than in the United States. As a result, Chinese miners can earn a higher return on their investment than American miners. .
The last factor is the current price of bitcoin. If the price goes up, miners will earn more money, and if it goes down, they will earn less.
Overall, if you’re willing to make a large upfront investment, live in a country with cheap electricity, and don’t mind waiting awhile for your earnings, then bitcoin mining can be a good way to earn some extra money.