is a system that requires miners to compete against each other to solve complex mathematical puzzles. What are these complex mathematical puzzles? Well, in its simplest explanation, miners need to make a prediction with their hash that is lower or at least equal to the target hash’s SHA256
You can imagine it like “brute force” where computers with more guesses have better opportunities to find the eventual answer. This is why Bitcoin miners have expensive computers since more powerful equipment equals higher amounts of guesses.
When a miner makes the right guess, a new BTC is minted and given to the miner. The same miner is also given a right to add the new block to the Bitcoin blockchain.
Bitcoin miners help keep the Bitcoin network secure. Mining is an important and integral part of Bitcoin that ensures fairness while keeping the Bitcoin network stable and safe. When there is no need to use expensive computers to mine bitcoins, any rogue miner can just invest in cheap computers and abuse the Bitcoin network. This is the logic behind using Proof-of-Work mechanism.
And if you are wondering why we need Proof-of-Work as a consensus algorithm in the first place, it’s simply due to the fact that a decentralized ledger always needs a general agreement. A good example is the comparison between monarchy vs. democracy. You need a system that everybody agrees to vote on when it comes to democracy while you just need to follow the orders of one king in a monarchy.
Monarchy in our analogy represents centralized systems while democracy represents blockchains.
In case you want to learn the detailed process of Bitcoin mining, you can read our Bitcoin mining explanation here