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How Does Bitcoin Mining Work?

How Does Bitcoin Mining Work?

In 2021, Tesla stopped taking Bitcoin for electric vehicle purchases. Why? Concern for the environmental toll of creating new units of the world’s best-known cryptocurrency in a process called mining.

The computers that mint new Bitcoin use a tremendous amount of electricity, often generated by fossil fuels. That real-world cost of electricity is one of the factors that give real-world value to the digital currency, which is currently trading at around $23,600.

Regardless of the source of electricity, and the cryptocurrency mining industry is moving toward renewable energy sources, mining is central to Bitcoin’s existence as a decentralized currency.

Whether you’re considering buying Bitcoin outright, mining it yourself or investing in the companies that mine it or make mining equipment, you’ll first want to understand what Bitcoin mining is in the first place.