Quote:
Originally Posted by corporatejay
What does mining do?
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I'm not sure an easy answer is possible, but...
Because it is a decentralized system bitcoin miners use the processing power of their computers to keep track of the transactions. New bitcoins are added to the system at a regular rate, and they go to the miners as a reward for doing the work. The biggest problem with this (I think) is that our computers are more than powerful enough to do this work, so they have to make it more difficult by getting the miners to do lots and lots (billions of calculations per second) of math to earn the bitcoins, hence the ridiculous mining rigs in the previous posts.
Think of it this way: A teacher asks a simple question, and whoever answers first get a prize. You'd have all the students yelling out at the same time, so the teacher makes them run a marathon before they can answer.