What Does Bitcoin Mining Mean?
What to Consider When Buying Bitcoin
Bitcoin (BTC) is a cryptocurrency – a type of digital asset, and it was the first of its kind. Since its creation in 2009, it has remained the most popular and well known cryptocurrency, and in 2025, the Bitcoin price passed the $100,000 mark.
Eliminating the need for expensive and time-draining intermediaries, like banks, Bitcoin operates on a decentralized network, enabling peer-to-peer financial transactions, through the use of blockchain technology.
Who Created Bitcoin?
The person or group of people that created Bitcoin used the pseudonym Satoshi Nakamoto, and their real identities have never been discovered. Bitcoin was first introduced in a 2008 whitepaper with the title “Bitcoin: A Peer-to-Peer Electronic Cash System.” The paper laid out the principles underpinning the concept and creation of a decentralized, digital currency. Then, in early 2009, the “genesis block,” which was the first ever Bitcoin block, was mined. BTC was officially launched and the world of digital finance was forever changed.
What Does Bitcoin Mining Mean?
New coins are created and BTC transactions are verified on the blockchain using a process called Bitcoin mining. It involves solving complex mathematical, encryption puzzles, which requires a massive amount of computing power and is exceptionally energy -intensive.
Bitcoin miners are in a race to solve these cryptographic problems first, so that they can earn the opportunity to add new blocks of transactions to the blockchain and be rewarded for their efforts with Bitcoin.
Bitcoin Mining: 3 Key Facts
- Bitcoin Mining Uses a POW Consensus Mechanism – In order to receive their Bitcoin rewards, miners need to prove that they have solved the computational problems, verified cryptocurrency transactions, and added them as new blocks to the blockchain. This is achieved using a decentralized proof-of-work consensus mechanism. The POW system enables secure peer-to-peer transaction processing, with no middlemen needed.
- Miners Are Rewarded in Bitcoin – Originally, the payment for mining a block of transactions on the Bitcoin blockchain was 50 BTC. Since then, around every four years a “halving” event has occurred where the reward amount is cut in half.
- Mining Has a Heavy Environmental Impact – Probably the most controversial aspect of Bitcoin mining is the detrimental impact it has on the environment because of the massive consumption of energy required to solve the encryption puzzles and verify blocks of transactions.
Where Can You Buy Bitcoin?
As more cryptocurrency exchanges are launched it’s becoming ever- easier to buy Bitcoin. Due to its huge popularity and consistently rising value, over the long-term, Bitcoin is available on every crypto exchange, unlike less well-established altcoins that may not be available everywhere.
Here are some of the ways you can purchase BTC:
- Crypto Exchanges: Cryptocurrency exchanges like MyMollet, Coinbase, and Binance, enable users to purchase Bitcoin using a wide variety of payment options ranging from bank transfer and credit cards to crypto wallet transfer.
- Payment Apps: A number of electronic financial service providers like PayPal and Cash App, don’t just facilitate traditional fiat purchases, but also support payments in Bitcoin.
- Bitcoin ATMs: These automated teller machines offer the convenience of a traditional ATM and allow users to purchase Bitcoin with cash or using debit cards.
- P2P Platforms: Peer-to-peer sites, such as LocalBitcoins enable individuals to make transactions directly between themselves.
What to Consider When Buying Bitcoin
- Risk Management: Since the Bitcoin price is characterized by high volatility it is critical to implement risk mitigation to ensure you minimize your exposure to the rapid fluctuations in Bitcoin value.
- Secure storage: As soon as you have bought your BTC, you should transfer it to a secure wallet, with a solid reputation. Cold storage in a physical wallet is considered safer than a hot wallet, which is more accessible, but easier to hack.
“The Grandfather of Cryptocurrency”, Bitcoin remains the most traded digital asset, with the largest market cap. Understanding how it is created, bought, sold, and stored, as well as its place within the broader digital currency ecosystem is essential for anyone considering entering the crypto Bitcoin market.
Want to find out more about major coins, concepts, technologies, and tools in the crypto space? Check out more articles from the MyMollet crypto glossary, and learn the fundamentals of cryptocurrency!
