I understand that it’s computers but who owns these computers and can you mine for bitcoins in any location or are certain locations better than others.
In: Technology
The location doesn’t matter, but the amount of computing power does determine if you have a realistic chance of mining anything at all.
A new coin (or rather a block which can contain multiple coins) is mined about once every 10 minutes. Bitcoin has a difficulty curve that keeps this time pretty consistent. Each of these ~10 minute periods is essentially a race to see who can guess a number that will give a valid result when entered into a complex one-way mathmatical formula. The winner gets the coins and then everyone has to start over again with new numbers.
Think of it like a lottery where the organizers secretly select 9 digits of a 10 digit number. Everyone can buy tickets one at a time (with the speed of their computer determining how fast they can buy them) and as soon as someone buys a ticket that matches those 9 digits they win and the game is restarted with a new number. To increase the difficulty the number of digits is periodically increased, which reduces the chance of a single ticket being the winner.
Over the years the difficulty of mining bitcoin has greatly increased. Using your personal computer to mine bitcoin is like trying to win by buying one ticket per minute while your competitors are buying a billion or more tickets per minute. And as soon as one of them wins you have to start over again. Without a large cluster of computers your chance of mining even a single bitcoin is actually less than your odds of winning the real lottery. This is why many miners are part of mining groups – they pool their odds and split the winnings.
In slightly more technical detail bitcoin mining involves calculating a SHA256 hash of a new block which will contain your own details, the previous blockchain state, some transactions, and finally an arbitrary number called a nonce. To “win” the resulting hash must have a certain number of leading zeros. Most hashes won’t have enough leading zeros, so you have to try with a different arbitrary number until either you win, or someone else wins and that changes the blockchain state forcing you to restart from scratch.
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