#DeFiGetsGraded What is happening in the Bitcoin network today?

1. How Bitcoin works (the basic function)

Bitcoin relies on a decentralized network (without a bank or central authority), and all transactions are recorded in a public digital ledger called the blockchain. This ledger is updated through millions of computers (nodes) around the world, each sharing a complete copy of the ledger.

Mining is the process by which miners verify transactions and add them to the blockchain. They use specialized hardware (ASICs) in a race to solve mathematical problems; the first to find the solution receives a new reward in Bitcoin.

Every approximately 10 minutes, a new block is added, and the difficulty level automatically adjusts every 2016 blocks (about every two weeks) to maintain a steady production rate.

2. Mining reward and halving

The current mining reward is 3.125 Bitcoin per block, after being reduced through a series of halvings. The last one was in April 2024, and the next one is expected in 2028.

3. Security and encryption

Bitcoin employs strong encryption techniques like SHA‑256 to ensure transaction security, along with a robust verification system that makes tampering nearly impossible.