Mining is validating transactions initiated in the Bitcoin network within a timeframe, updating and adding new blocks on the blockchain. Those who mine are called miners. Simply put, mining is a bookkeeping process where miners are the bookkeepers and blockchain is the ledger.
What motivates miners to keep mining?
Bitcoin adopts a “distributed updated system” where every miner competes for the right to update the ledger. The one who gets to update the ledger in the new block will receive newly generated Bitcoins as a reward. Therefore, mining generates Bitcoins.
Initially, Satoshi designed the system such that after every 210,000 blocks, the Bitcoin block reward will be halved, until it reaches the smallest fraction of one Bitcoin.
Hence, Bitcoin has a supply cap, similar to gold. Hence, people often call Bitcoin “digital gold” and its creation process, “mining”.
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