Mint Money Knowledge Center: What is Bitcoin Mining?

What is BitcoinBitcoin is a type of cryptocurrency. The Bitcoin mining process for producing currency began in 2009. It involves a specific type of software, called Bitcoin mining software. The mining software essentially solves mathematical problems and is paid a certain amount of Bitcoin currency in exchange for doing so. By incentivizing miners via payment, more people are encouraged to mine Bitcoin currency.

The mathematical problems Bitcoin mining software endeavors to solve is to compile recent transactions into blocks. The software then solves a difficult computational "puzzle". The first Bitcoin miner to solve the problem lays claim to the next block available and claims the value for solving it.

The benefits of using Bitcoin in transactions as opposed to traditional government-issued currency includes freedom from the inflation caused by governments over-printing and devaluing money, the ability to conduct transactions privately and securely, and the ability to generate wealth where there was none before.

Bitcoin mining is no longer just a fringe currency. It is now accepted by many mainstream businesses, both online and offline. It is accepted at many businesses around the world, including diners, spas, and e-commerce trading sites.

Though it is not regulated by the U.S. or any other government or governmental agency, Bitcoin is not without regulations. The system is designed so that it can't overproduce wealth (thereby devaluing all Bitcoin currency), and a single user is prohibited from dominating the system and taking over all of the Bitcoin mining. Security features are also built into the system, making it safer to trade in Bitcoin than with most other types of currency, including credit and debit cards.

You can get started Bitcoin mining today by signing up at Mint.com.

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