Here is the working mechanism of Bitcoin Mining:
- Each block of transactions is assigned a hash or string. Bitcoin uses the SHA-256 algorithm to create hashes that are always 64 characters long.
- Bitcoin miners start producing hashes with mining software. The goal is to produce a hash less than or equal the block hash.
- The block is added to the copy of the Bitcoin blockchain that the miner has created, as they were the first ones to have the desired hash.
- The accuracy of the block is verified by other miners, as well as Bitcoin security nodes. The block will then be uploaded to the Bitcoin blockchain.
- The Bitcoin miner will then receive block rewards. Blocks award users a fixed amount of Bitcoin. This quantity is halved every 210,000 blocks.
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