How do you mine bitcoins?
Anyone can install Bitcoin's mining software, which then uses the computer's processing power (using the CPU or GPU) to carry out intensive calculations – you can think of it like trying to search for prime numbers. Lots of people might be working on the same unit of work - a computationally complicated problem. The aim is to find a certain sequence of data, called a "block", that produces a particular pattern when the Bitcoin "hash" algorithm is applied to the data. Whoever's computer manages to do that will win bitcoins. When it started out, it was relatively easy to mine bitcoins, but as more people are trying to get in on the action, it's become computationally much more challenging -- in the same way that it's easier to find the early prime numbers, but harder now. The network is used to monitor and verify the creation of new bitcoins and all Bitcoin transactions, which are filed in a log. There is a cap on the number or bitcoins that will be produced, which is 21 million, and a pre-defined schedule of how quickly they are released up until 2040.