Look at the image to understand the difference between the traditional banking system and Bitcoin.
Just like opening a new bank account, you create your personal wallet address for Bitcoin. The bank account is protected by a PIN, while Bitcoin is protected by a private key (digital signature). When we make a transaction in the bank account, the bank keeps the record private. On the other hand, for Bitcoin, the public ledger is transmitted on the global network.
In banks, money is transferred through an electronic communications system, but Bitcoin transactions are validated by a computer technology called mining.
This is how the author of Mastering Bitcoin defines what Bitcoin mining is:
Mining is like a giant, competitive Sudoku that restarts every time someone finds a solution and whose difficulty is automatically adjusted so that it takes about 10 minutes to find a solution.
A miner's job is to find the solution in this sudoku game by generating a new block containing all the transactions in the last block. This process protects the system against false transactions that spend the same amount of Bitcoin more than once, known as double spending.
This process, also known as "proof of work", validates the new transactions made and records them in the blockchain, as we explained above. This is how a new Bitcoin is added to the money supply.
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