What is Mining?

 It is a process  by which new crypto coins like are generated and new transactions validated.  It uses decentralised networks of computers all over the world to verify and safeguard blockchains, which are virtual ledgers that record bitcoin transactions. It's also how the blockchain network confirms new transactions, and it's a crucial aspect of its care and development. In exchange for providing their processing power, computers in the network are rewarded with new currencies. It's a virtuous circle: miners keep the blockchain secure, the blockchain rewards coins, and the coins incentivize miners to keep the network secure. The process is repeated when the first machine solves the problem and obtains the next block of bitcoins.

Miners are rewarded with bitcoins in exchange for assisting with the primary aim of mining, which is to help validate and monitor Bitcoin transactions in order to assure their legality. The miner who is the first to find a solution to a complex hashing challenge gets rewarded, and the probability that a participant will  find the solution is proportional to their percentage of total mining power.

How does mining work

You'll need either a graphics processing unit (GPU) or an application-specific integrated circuit (ASIC) to setup your mining rig. They are costly and can cost anywhere from $500 to tens of thousands of dollars, and total cost depends on how big you want your mining setup to be. Verifying the blockchain uses a good amount of processing power, which is provided by miners.
Miners buy the mining equipment and pay for the electricity that keeps it functioning (and cool). It is obvious that the number of Bitcoins should  be greater than the cost of maintaining the mining setup in order to be profitable.
Every machine on the network tries to be the first one to guess a "hash," a 64-digit hexadecimal number. The miner is more likely to get the rewarded if the computer can spew forth guesses quickly.
Only 21 million bitcoins will ever exist. The final block will be mined in 2140. 

In the early days of Bitcoin anyone was able to mine Bitcoin using their laptop . As more people became interested in mining of Bitcoin ,the network grew so mining algorithm became more challenging. Because the Bitcoin algorithm seeks to generate a new block every 10 minutes, this is the case. on average. 1 With more miners, the chances of someone solving the proper hash faster rise, and the challenge of achieving the 10-minute target rises as well. Consider what would happen if the network grew to tens of thousands, if not millions, of users.. That's a lot of energy consumption.

Legality of Mining

Bitcoin mining is legal in some countries and illegal in some countries. It totally dependent on your location.  Bitcoin may pose a threat to  government control of financial markets. As a result, Bitcoin is entirely banned in some countries.

Bitcoin mining and ownership are allowed in a lot of countries.  Countries like Bangladesh, China, the Dominican Republic, North Macedonia, Qatar, and Vietnam have all prohibited Bitcoin mining since 2018. 

Overall, Bitcoin mining is legal in most parts of the world and with countries making Bitcoin legal more and more countries will follow in coming years.


Importance of Mining

In addition to releasing new currencies into circulation, mining is essential for the security of Bitcoin. It secures and verifies the blockchain, allowing cryptocurrencies to function as a peer-to-peer decentralised network without the need for third-party supervision. Miners are also encouraged to provide their processing power to the network.