WEBVTT

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[MUSIC PLAYING]

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Bitcoin mining is the process
of using sophisticated computers

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to verify the legitimacy
of Bitcoin transactions,

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and to enter new bitcoins
into circulation.

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Most of the nearly 18.5
million bitcoins in circulation

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have been created by miners.

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To earn bitcoins
through mining, miners

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need to meet two conditions.

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First they need to
verify one megabyte

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worth of Bitcoin transactions
also known as a block.

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This is done by using
a complex computer

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system to calculate a
mathematical equation

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and come up with a 64 digit
hexadecimal code or hash.

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Step two is a little trickier.

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To get paid, a miner
has to be the first one

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to arrive at the right answer
or at least the closest

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to the answer.

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This process also
called Proof of Work

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is designed to make users
expand efforts solving

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a mathematical quiz in order to
deter fraudulent Bitcoin sales.

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The process uses graphic
processing units or GPUs,

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and application specific
integrated circuits or ASICs,

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to solve extremely complex
computational math problems.

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Bitcoin protocol says that
the number of bitcoins

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will be capped at 21 million,
but with the mining rate

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being reduced over time, it's
likely the final Bitcoin won't

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be circulated until
the year 2140.

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