WEBVTT

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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,

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the closest 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

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or GPUs 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.

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But with the mining rate
being reduced over time,

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it's likely the final
bitcoin won't be

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circulated until the year 2140.

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