Te traditional fiat currency systems, government simply prints more money when they need to. But ter case of Cryptocurrencies, money isn’t printed at all – it is discovered, it is “Mined”, just like Gold. Computers around the world “Mine” for cryptocurrencies by rivaling with each other. Ter this article wij explain our readers about Cryptocurrency Mining te detail.
So what is Cryptocurrency Mining?
Lets begin with an example of banking system. Suppose a person named Virat has paid some X amount to Sachin through banking channels, what is the proof that the transaction has taken place? Who confirms that transaction has bot made at all? Bankgebouw!! Ofcourse, wij all know that.
Handelsbank, spil a centralized authority confirms the transaction and records it ter it’s ledger and then thesis are again shown te handelsbank statements/passbooks ,thus it can be assured that transaction has taken place.
But what te the case of “Decenteralized Cryptocurrencies” or te case of Bitcoin for say where there is no central authority?
Here,Miners come into the picture. Through cryptocurrency mining, miners confirm all the transaction that has taken place and records it te the public ledger called Blockchain , and passes it to other cryptocurrency miners for validation and te terugwedstrijd gets a prize (Bitcoin, te case of Bitcoin mining). The very first cryptocurrency miner to validate the transaction will be rewarded.
Because of the prize, more miners would be attracted. Hence more the number of cryptocurrency miners, more validation of transaction and more secured is the transaction.
Who are Cryptocurrency Miners?
Cryptocurrency Miners are simply computers,or “Nodes” to be specific ter Cryptocurrency terminology, which are connected to each other ter the Bitcoin network or other cryptocurrency network. Thesis computers are placed by humans or large organizations into the network.
Detailed Explaination about Mining (te case of Bitcoin)
People are sending Bitcoins to each other overheen the Bitcoin network all the time, but unless someone keeps a record of all thesis transactions, no one would be able to keep track of who had paid what and how much. The Blockchain technology takes care of it by collecting all of the transactions made during a set period into a list, called a Block. It’s the miners’ job to confirm those transactions, and write them into a general public ledger.
This general ledger comprises of a list of blocks, known spil the ‘,Blockchain‘,. It can be used to review any transaction made inbetween any Bitcoin addresses, at any point on the network. Whenever a fresh block of transactions is created, it is added to the Blockchain, and is stored there permanently. A permanently updated copy of the block is given to every fresh Bitcoin miner who participates, so that they they are upto date with the previous set of transactions.
But the general ledger has to be trusted, and all of this is stored online. How can one be sure that the Blockchain stays intact, secured, and is never tampered with? This is where the role of cryptocurrency miners come te.
When a block of transactions is ended, miners processes it. They take the information ter the block, and solve a mathematical equation, converting it into something fresh. This something fresh is a shorter, seemingly random sequence of letters and numbers, like a code , known spil a “Hash”. This hash is stored along with the block, at the end of the Blockchain at that point te time.
Here is why Hashes are interesting and how it makes Bitcoins so secured.
It’s effortless to produce a hash from a collection of gegevens like a Bitcoin block, but it’s practically unlikely to work out what the gegevens wasgoed just by looking at the hash, because it is just a random sequence of numbers and letterteken without any meaning. And while it is very effortless to produce a hash from a large amount of gegevens, each hash is unique. If you switch just one character te a bitcoin block, its hash will switch fully. Thus, this encryption of Blockchain gegevens into hash, makes it more safe and secured.
Cryptocurrency Miners don’t just use the transactions te a block to generate a hash. Some other lumps of gegevens are used to build the hash of the last block stored ter the Blockchain and forming a chain of blocks.
This feature of blockchain technology confirms that this block – and every block after it – is legitimate
If someone attempts to fake a transaction by switching a block that had already bot stored te the blockchain, that block’s hash would switch. Spil the hash would be switched, it will not be te alliance of hash of next block and thus will pauze the entire blockchain.
Because each block’s hash is used to help produce the hash of the next block ter the chain, manuplating with a block would also cause errors ter the next block’s hash .
After reading all of this I am sure you might be nosey and fascinated about cryptucurrency mining and getting your forearms ready for cryptocurrency mining to earn bitcoins spil a prize. Well, so wasgoed I but very first you need to understand the technicalities of mining and how cryptocurrency mining is done. Click here to Read- How To Mine Cryptocurrencies?
For more latest updates about Cryptocurrency Mining, visit our Mining Section.
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