Bitcoin mining rests squarely on the shoulders of the Proof-of-Work algorithm, which stipulates that miners must solve a complex mathematical problem to verify transactions before they’re added to the blockchain. Once this is completed the miner is rewarded for their work with Bitcoin. The Proof of Work (PoW) approach is a security measure that is used to ensure that no one can game the network or make fraudulent transactions.

This Proof of Work (PoW) concept was around before the first cryptocurrency came out. The anonymous inventor of Bitcoin, Satoshi Nakamoto wrote about how this concept could be used to create a reliable digital currency and set the wheels in motion that would forever alter the way that value is transmitted and stored.

The Proof of Work (PoW) approach is an integral part of cryptocurrency “mining”. It must be done to make sure that verified transactions can be added to the distributed ledger of the blockchain. The Proof of Work (PoW) approach is the best way to prove that miners’ machines have expanded the necessary effort to solve the algorithm. This approach is fiendishly complex and requires uninterrupted power supplies and Internet connections. The mining machines themselves have to be extremely powerful and able to deal with huge numbers of calculations every second. And all that power produces a lot of heat which needs to be taken care of via dedicated round-the-clock cooling.

But the effort is worth it because the miner who can verify transactions first is the one that’s rewarded with valuable Bitcoins.