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If you’ve ever wondered how Bitcoin actually works—beyond the price charts and celebrity tweets—this one's for you.
At The Street Roundtable, Hive Digital Technologies’ Executive Chairman Frank Holmes joined host Fefe Dlamini to explain the nuts and bolts of Bitcoin mining.
So what is Bitcoin mining?
"Bitcoin mining is like a big guessing game on computers," Holmes explained. "People use powerful computers to solve really hard puzzles. And when they get the answer right, they earn some new—they call them Virgin Bitcoins—as a prize."
The process is basically computers racing to solve math problems. Whoever wins gets new Bitcoin, and also gets to help verify recent transactions on the blockchain. That’s important because it keeps the network secure and ensures nobody can cheat the system.
"There’s no one central Visa place that can lock it down," Holmes said. "If someone tries to shut it down, the other thousands of nodes around the world keep it functioning 24/7. That’s what Bitcoin mining does."
Why decentralization matters
Unlike a traditional bank or payment processor, Bitcoin is fully decentralized. That means there’s no one company or country in control. The network runs on over 21,000 independent nodes (think of them like checkpoints) scattered across the globe. If one fails, the rest keep running.
Holmes compared it to Napster, the peer-to-peer file sharing platform that revolutionized music in the early 2000s. "Napster demonstrated peer-to-peer file sharing," he said. "Bitcoin is decentralized with over 21,000 nodes around the world. That is really key for the Bitcoin ecosystem to operate independently outside of any big money-centered banks."
It’s also constantly running. "You wake up—there are no holidays. It just functions beautifully and seamlessly."
Bitcoin’s roots and security
Holmes took it back even further than Bitcoin’s 2009 launch to make a point about the tech behind it.
"We have to go back in history to the creation of the blockchain, which really shocks people—it was in 1991, before the internet was released," he said. "It was an open ledger of every transaction. It doesn’t let you know the transaction between you and I, but it knows that we did make a transaction, on this date and this amount."
That’s where timestamping comes in—something that ensures no one can “fudge the numbers.” Then there’s the encryption layer, SHA-256, the same algorithm Apple uses for Face ID. It protects the system from hackers and keeps the blockchain honest.
What about the 51% attack?
A common concern is whether one group could take over more than half of the network and manipulate it.
Holmes was quick to downplay the risk. “That’s why global diversification matters,” he said. Hive mines Bitcoin in Sweden, Canada, Paraguay, and works with miners in Texas and Ethiopia. “It is a global reach… and that’s why the adoption and interest has caught on so well.”
With thousands of nodes spread out globally, taking over 51% of the network is extremely difficult and unlikely.
Why you can’t mine Bitcoin on your laptop anymore
In the early days, anyone could mine Bitcoin from their laptop. But that’s no longer the case.
"It’s so competitive," Holmes said. "Every four years, the amount of Bitcoin that’s available to be mined gets cut in half." This is known as the “halving” and it’s one of the reasons why Bitcoin is scarce.
Today, miners need specialized computers called ASICs (Application-Specific Integrated Circuits). These are powerful, energy-efficient machines built for one thing: mining Bitcoin. "It’s like a jump ball every 10 minutes," Holmes said. "If you’re good at jumping, you get the new Bitcoin. But you need the best ASIC chips and cheap energy to even compete."
Instead of shovels and picks like in gold mining, "we’re coming in with algorithms and ASIC chips to validate and support the global network."
Bitcoin mining is the beating heart of the Bitcoin network. It rewards miners for keeping the system running smoothly and ensures no single actor can take over. It’s digital gold mining—but with global computers, math puzzles, and zero days off.
And as Frank Holmes put it: “It just functions beautifully.”
This article has been published in TheStreet via Yahoo News.
