Bitcoin mining is the process of creating new bitcoin by solving puzzles. It consists of computing systems equipped with specialized chips competing to solve mathematical puzzles. The first bitcoin miner (as these systems are called) to solve the puzzle is rewarded with bitcoin.
Bitcoin miners perform this work because they can earn transaction fees paid by users for faster transaction processing, and newly created bitcoins issued into existence according to a fixed formula. This provides a smart way to issue the currency and also creates an incentive for more people to mine.
The very first block chain was mined on January 3rd 2009 by Satoshi Nakamoto, who is widely believed to be a pseudonym for the Bitcoin creator or creators themselves. The Bitcoin protocol was released in 2008 as open source software so that anyone could download it and start producing their own version of the currency — known as a “fork” — which would be compatible with other versions of Bitcoin but contain different rules about how coins could be earned or spent.
In practice, though, there are only two major versions of this software: Bitcoin Core and Bitcoin Cash — both based on Nakamoto’s original code but with different policies around how coins can be earned or spent.