What is bitcoin mining and how does it work?

Bitcoin mining is the process of using computer power to mint unique digital tokens that can be transmitted across the internet and used as currency to buy goods and services. Bitcoin mining also adds to—and manages—the digital ledger, or blockchain, which records all Bitcoin transactions.

How does bitcoin mining consume electricity?

Bitcoin mining has driven a surge in the consumption of electricity, which is often produced by burning fossil fuels. Bitcoin mining uses almost as much energy annually as Poland, according to the University of Cambridge. As a result, environmental authorities and advocates say Bitcoin mining is worsening global warming.

What equipment is needed for Bitcoin mining?

Computer equipment. The most cost-prohibitive aspect of Bitcoin mining involves the hardware. You’ll need a powerful computer that uses an enormous amount of electricity in order to successfully mine Bitcoin. It’s not uncommon for the hardware costs to run around $10,000 or more.