ELI5: What is mining Bitcoin and how it works?

Imagine everyone in the world keeps track of all the candies traded in a giant notebook. This notebook is called the blockchain.

• Every time someone gives someone else candy, it's like a transaction, and it needs to be written down in the notebook.

1. Collect all the new candy transactions (like "Alice gave Bob 3 candies").
2. Put them together into a new page for the notebook, called a block.
3. The tricky part: Before they can add the page, they have to solve a really hard puzzle. Think of it like finding a specific grain of sand on a giant beach! This puzzle is a complex mathematical problem.
4. The first kid to solve the puzzle gets to add the page to the notebook.

• When a miner solves the puzzle and adds a new page (block) to the notebook (blockchain), they get a reward – a small amount of new candy (Bitcoin)! This is how new Bitcoins are created.

• Everyone else checks that the solved puzzle is correct. If it is, they all agree and add the new page to their own copy of the notebook.

• Checking candy trades (transactions).
• Solving a tough puzzle (mathematical problem).
• Adding a page to the giant candy notebook (blockchain).
• Getting rewarded with candy (Bitcoin) for doing it!