What is Bitcoin Mining?
When we transact with the modern banks, we simply have to tell them to transfer money from our account to so and so account. It is the bank who control our money and update the ledger containing all the transactions. In case of Bitcoin, it is a decentralized network for peer to peer transactions. This means that the system can transfer funds from one address to another without any central authority. Now, how do you create a decentralized system with enough power to update ledger without any authority and make sure that it doesn't get corrupt or negligent.
The protocols of the Bitcoin system solve this problem in an efficient way. Anyone who wants to be a part of the Bitcoin network for updating the ledger can do so by solving a complex mathematical equation. This is done by our modern computers. Once an equation is solved, the ledger gets updated. The copy of the ledger is sent to other computers on the network so that they can validate it and update their copy of the ledger.
Miners with more computing power tend to succeed more often. After you have updated the ledger the system generates a fixed amount of bitcoin and gives it to you as compensation. This is Bitcoin Mining in a nutshell.