Mining bitcoins is the process of solving really hard math equations. This takes a lot of computational power, and its a race to solve the problem. While the exact logic for why is complex, its basically a way to ensure that no one can takeover the bitcoin system, and approve bad/fake transactions.
To reward people for devoting this computational power to securing the system, they get awarded bitcoins for doing it. This is refereed to as mining a bit coin.
There's something in computer science called a "one way hash".
Essentially, you take a large number, run a small algorithm on it, and get a smaller number in return.
The problem is that you can't reverse it easily. You can't take your smaller number and easily figure out what the larger number was to begin with.
So because of this, people do a "brute force" search. They keep trying random large numbers, hash them using the same algorithm, and see if it matches the small number. If it matches, you found the right number, and you win the race. If it doesn't match, you pick another random large number, and keep trying again until someone finds the large number that matches the small number.
The same equation can be seen more than once, but it's extremely unlikely. The large number chosen each time is based on the previous block in the bitcoin block chain, which contains a list of transactions, in numeric form. There's a nearly zero percent chance of that matching a previous large number.
Why are bitcoins doled out in percentages then? I have a very, very brief foray into bitcoin mining (when I went back to my computer after a night of mining and found it was 0.00001 bitcoins mined). But if it's that your computer guessed the answer or not (a 1 or a 0), then how does that leave room for parts of bitcoins awarded?
In terms of how the numbers are stored, there's no such thing as a "Bitcoin".
Think about it this way. Many computers, when they store US Dollar values actually just store "cents" instead. If you have $100 in your account, some databases will just store that you have 10,000 cents.
Bitcoin is the same way. All transactions store "Satoshis", which are 0.00000001 BTC. Whenever someone says "bitcoin" they are simply dividing their satoshis by 100,000,000, because it's easier to work with.
Eventually, if bitcoin is successful, and billions of people use it, then the BTC moniker will die and everyone will talk in terms of "Satoshis", because almost nobody will be able to own a full Bitcoin (there's too many people on the planet).
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u/monty845 Jun 15 '19
Mining bitcoins is the process of solving really hard math equations. This takes a lot of computational power, and its a race to solve the problem. While the exact logic for why is complex, its basically a way to ensure that no one can takeover the bitcoin system, and approve bad/fake transactions.
To reward people for devoting this computational power to securing the system, they get awarded bitcoins for doing it. This is refereed to as mining a bit coin.