What is Bitcoin and how is it mined?

Abstract

This chapter provides an introduction to Bitcoin and Bitcoin mining. It begins with a historical overview of Bitcoin’s initial creation by Satoshi Nakamoto and a brief overview of its mechanics and workings. The chapter then discusses how Bitcoin is mined through the ‘proof-of-work’ production process. Proof-of-work is explained in some detail and examples are given. Bitcoin mining is explained in the chapter to essentially be a ‘high-stakes numbers guessing game’ where losers of the game receive no reward, while winners receive newly digitally minted Bitcoin. The guessing game continues today as new Bitcoin are mined every day.