Although I am late to write about Bitcoin and cryptocurrencies, I still want to bring a different perspective to this issue with my comment. Bitcoin is a digital currency created by coding in electronic environment and obtained, transferred and issued electronically. It is not under the control of any center, person, institution or organization. Because it is in the electronic environment, it is not a printed (banknote) currency unlike the known currencies. Cryptocurrency, which is a developing technology as of now, is increasing day by day as well as increasing its types. Let's briefly introduce the main topics on this subject.
Cryptocurrency?
What we call Cryptocurrency is a monetary system like TL, Dollar, Euro that we know. However, what distinguishes this system from other currencies is the exchange of digital information with a transaction made possible by certain crypto principles. The purpose of being crypto is that all monetary transactions are carried out in an environment of trust and the creation of new coins is done under control. Our first cryptocurrency is Bitcoin, which was found in 2008 and is very popular today. In total there are currently more than 1300 cryptocurrencies.
Bitcoin?
It is an "electronic" cryptocurrency based on mathematical proof, released on January 3, 2008 by a developer named Satoshi Nakamoto (who is still unknown). Bitcoin is the first example of Cryptocurrency. The most important feature of Bitcoin is that it is not tied to a central place. The best part of this currency is that it cannot be physically produced by central banks that are not accountable to anyone and set their own rules. In short, it is a currency whose basis is Mathematics.
Unlimited Bitcoin cannot be produced. Due to Bitcoin protocols, only 21 million Bitcoins can be produced by miners. As miners find coins, passwords become harder to crack and harder to produce. For this reason, it is said that the production of the 21 millionth Bitcoin may take approximately 2140s.
Blockchain?
Now, this subject may sound a bit complicated, but I will try to simplify it as I understand it. While making money transfers in Bitcoin, there is a digital registry where these transfers are kept. Let's call this registry the "block". Let's call the keeping of all transfers in order "Blockchain", that is, "Blockchain". Since these registry books are open source, anyone can easily access this data. There are three pieces of information in these records. Sender's account number, Receiver's account number and amount sent.
The issue that ensures that these records are secure is that they can be kept by anyone, as they are an open source structure. Yes, everyone can be a recorder and since these records are always in sync with each other, someone cannot come out and cheat or cheat on the records.
In the title of Bitcoin, we said that a currency based on mathematics. So how does this system work? Now let's think about this, I sent 1 Bitcoin to Ahmet, before I sent this, I sent and received money to many more people. In order for the system to show me exactly how much money is left in my account, it should calculate all the money coming into and out of my account and show me the final result. This is the secure mathematical structure in the Bitcoin system.
This was just an example of my transfer. Considering that billions of transfers occur at the same time, these mathematical problems must be solved at the same time. These problems are generated with a "cryptographic hash function" and are waiting to be solved. If we briefly explain the hash issue, it means converting very complex and varying lengths of information into fixed-length information.
Mining?
In order to solve these generated (SHA-256) cryptographic hash algorithms / problems, computers with very powerful hardware are required. Under normal conditions, a powerful computer can solve a SHA-256 problem in about 10 minutes. However, since billions of problems have to be solved at the same time, a lot of processing power is required. The process of solving these problems is called mining.
Well, the best answer to the question of why we are mining is the word "reward". If you help to keep the records, that is, the blocks that I mentioned by mining, new bitcoins are created thanks to you and the people who do this work. And the generated bitcoins are shared to the miners' accounts. The thing that upsets us here is that the more processor power you have, the greater your capacity to win prizes.
In other words, the more processor power, the more bitcoin reward earnings.