About blockchain

About Bitcoin & Blockchain

What Is Blockchain?

The blockchain is a virtual database consisting of a linear sequence of memory blocks that store transaction data. Blockchains run on locally hosted nodes that store the full transaction history, confirm transactions and perform computational work required to add new blocks. Every blockchain is governed by a protocol that determines its functionality and ensures security.

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Ways to acquire Bitcoin

There are two principal ways how you can get hold of Bitcoin: mine it or buy it. Bitcoin mining today is done via mining pools, and all of its participants get their rewards proportionally to their computational contribution to the hashing power of the pool. Thus, you can share your computational power with a mining pool and get rewarded in Bitcoin every time it mines a new block.

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Mining as a financial instrument

Cryptocurrency mining provides miners with rewards. Cryptocurrency has a value determined by the market, but mining has its costs. Mining machines consume electric power and require massive cooling. Therefore, to make mining profitable, miners have to maintain a positive balance between mining costs and mining income.

Mining infrastructure

The two primary elements of cryptocurrency mining infrastructure are miners and mining pools. Miners have mining machines that generate hashing power which is necessary for processing transactions and finding the right hash. Miners share their hashing power with the pool, which increases its chances of finding the right hash and mining the block. In return, miners get rewarded proportionally to the hashing power they shared with the pool.

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Mining rewards

Mining rewards consist of the coins that are mined with every new block and transaction commissions that transaction senders pay to miners. New cryptocurrency coins are mined with every new block.