What is Mining?
Mining is a creative solution to the problem of how do you build a big enough computer to operate a global, digital money.
By offering a reward, Bitcoin has a built an incentive for people to connect their computers to the network. Collectively, these computers form a supercomputer.
What is Bitcoin?
Bitcoin is digital money, built around owning and sending 21 million digital coins. Each coin is divisible to 8 decimals.
You can own and send a partial Bitcoin.
In order to transact on the network, a post must be made to the list. To eliminate any dispute, the list is viewable by the public. The list contains Bitcoin's entire history of receipts, as well as irrefutable proof of all current balances.
The list requires substantial computing power to stay updated and “running”. Rather than operating on one central computer, Bitcoin has established a global computer. The work done by computers to “run” the Bitcoin list is called mining. The owners and operators of these computers are called miners.
As a reward for the computing work, one miner is issued 6.25 new Bitcoin. This reward occurs every ten minutes. This reward system will continue until all 21 million Bitcoin have been issued.
That is how Bitcoin works.