Bitcoin is the latest trend in the cryptocurrency world which aims to disrupt the centralized banking system of the world by making it decentralized. Before we jump into the world of crypto-currency we need to understand what is Bitcoin and how to mine with python?

A bitcoin is an online form of currency that was created in January of 2009 by a mysterious man who goes by the pseudonym “Satoshi Nakamoto”. The identity of the person is mystery to date and Bitcoin actually offers a lower transaction fee than a traditional payment system for even a large amount of money and all you need to send someone money is their wallet address.

There are no physical coins lying around with the name bitcoin on them but the whole thing is virtual which is maintained on a public ledger to which everyone has equal access. All the transactions are verified with a huge amount of computing power and they are not issued by any bank. They are truly decentralized and secure at the same time. Bitcoin is also commonly known as “BTC”.

The Bitcoin ecosystem is made out of nodes or miners who execute the bitcoin code and store it in the blockchain. Each blockchain contains transactions in them and everyone has the whole blockchain to them, thus they can access and see the new blocks being added to the system and it is tamper-proof.

Anyone can view the transactions happening right now and there are over 12000 nodes as of January 2021 and this number keeps on growing every day. Bitcoins are stored in wallets with their own address and it is managed using the public key and the private key which uses encryption to generate long length of strings. The Public key can be thought of as a bank account number or a UPI ID. It is public and telling it to others will do no harm to you. On the other hand, your private key is like your ATM pin or the UPI ID pin. You should never disclose it to anyone else and keep it private at all times.

Mining is the process by which bitcoins are gradually released to become a part of the circulation. Mining generally refers to solving a computationally tough mathematical puzzle. Bitcoin Mining is the process of adding verified transactions to the chain and the reward gets halved every 210,000 blocks that are mined. In 2009 the reward was 50 bitcoins per block and after the third halving on 11th MAy 2020, the reward is now down to 6.25 bitcoins.

Any hardware specification can be used for mining but some are just more efficient than the others like ASIC of Application Specific Integrated Circuits or even GPU which outperform the CPU and mine faster than a CPU. One bitcoin can be divided up to 8 decimal places and the smallest unit is known as one Satoshi. If the miners do accept the change, then it can be further divided up into more decimal places.

A Bitcoin Transaction has a miner’s fee attached with it and every transaction is added to a new blockchain and then the next block gets created with the correct hash. With the public key of the sender, the message can be decrypted, and hence never share your private key with anyone.

Mining is achieved by finding the correct hash which has a preset number of zeros in the beginning and it also signifies the difficulty level.