You may have heard that there are only two ways to acquire crypto: either through a broker (that is, someone who already has some crypto and is willing to sell it) or by a process called mining. But what exactly is mining?

“Gold for Nerds”

As talk show host Stephen Colbert aptly put it, crypto is “Gold for nerds.” This saying rings especially true for crypto miners, who “mine” for Bitcoins just as one might mine for gold.

The most simple purpose for mining is to introduce more bitcoins into circulation. There will only ever be 21 bitcoins available to the public, and right now only about 19 million have been excavated, with the last one to be mined in around the year 2140.

The first “block” of coins to be mined were mined by Satoshi Nakamoto, who is the anonymous founder of Bitcoin. Now, bitcoins are mined through designated miners who earn a block of bitcoins in return for their work.

A Well-Oiled Machine

Another purpose of miners is to verify transactions. Since cryptocurrency is a peer-to-peer network, it relies on the work of miners to make sure everything runs smoothly and safely. Everything is done on the blockchain, which ensures full transparency between users and miners, and avoids common pitfalls like double-spending.

Double-spending is when a Bitcoin user fraudulently tries to use the same token twice, somewhat like using counterfeit cash. However, since every transaction is recorded and stored on the blockchain via miners, these sorts of illicit interactions are meant to be avoided.

What’s more is that becoming a miner allows you to have a voice in Bitcoin elections, called Bitcoin Improvement Protocol, or BIP for short. You will have a say in all proposed changes concerning Bitcoin and how it operates.

How to Start Mining

Mining Bitcoins is a process in which you have to be the first miner to arrive at the solution of a complex mathematical problem. Once, miners could earn a block of coins in as little as ten minutes–which would not be worth approximately $450,000 apiece.

Basically, miners are tasked with coming up with a “hash”: which, in other words, is a 64-digit hexadecimal number that is either the same as or less than the target hash. That is why a computer is required: since it’s more of an intricate guessing game rather than a brainpower puzzle, a computer software designed for these problems is needed to become a viable player. The stronger the computer, the better chance a miner has at being the first to solve these equations.

Though the profit of solving blocks is considerably less now than it was in 2009, each solved “block” provides a profit of about $240,000. Not bad for a lowly miner, eh?