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CRYTOCURRENCY MINING




As we know, cryptocurrencies are totally virtual and digital money. They don’t have any physical appearance. They can be stored in Blockchain Wallets and various exchanges depending on the user. When we want to do a transaction, we either SEND/ RECEIVE amount. To perform these transactions there are some process undertaken for a successful payment. In this process, when a person sends some crypto currencies to other person then the transaction is recorded in the block. This block contains some mathematical complex puzzle which is solved by miners. Miners are those persons who mine bitcoins and other cryptocurrencies. They have many Computers with best CPU processors and a high-speed internet which helps to solve those transaction’s mathematical puzzles. In return they get a reward for every transaction in form of crypto currency. The fees which we spent on our transaction are rewards for miners. This process of successfully performance of a transaction by a miner is called as ‘MINING’.

CONCEPT STUDY

Mining is the integral process wherein generation, transmission and validation of transactions of cryptocurrencies is done. It ensures stable, secure and safe propagation of the currency from the payer to payee. Unlike fiat currency, where a centralized authority controls and regulates the transactions, cryptocurrencies are decentralized and work on a peer-to-peer system. Banks that generate physical currency and monitor the transactions require huge infrastructure to function and operate. Cryptocurrencies overcome this need by implementing a mining system where people in the network, called 'miners' or 'nodes', monitor and validate transactions which generates currency.

In cryptocurrency, a transaction is a transfer of coins from one wallet to another. When a transaction is made, the details of the transaction will be broadcast to every node in the network. The transactions made over a set period of time are collected to form a 'Block'. To incorporate transparency in the system, it is designed in such a way that all the transactions made from the inception of the currency are recorded  and maintained in a general ledger called the 'Block chain' which, as the name  suggests, is  a  list  of  blocks  created  from  the beginning.



MAJOR ROLE OF MINERS


Miners play a predominant role in mining. Miners process
transactions by verifying the ownership of the currency from
source to destination. Every transaction contains the hash of

the previous transaction made by the owner through which  authenticity of a present transaction is tested, thereby validating it.  Miners also inhibit double spending of the currency through this validation process.

The main purpose of mining is to generate and release coin into its coin economy. Whenever a transaction takes
place and is validated, miners collect these transactions and include them into the block they are currently solving. Every block has to be solved before being broadcasted and put in the block chain. Solving of a block involves mathematical puzzles which are difficult to unlock and crack provided there will be some constraints on the output generated. Only on solving the mathematical puzzle is one allowed to add the block to the ledger and a reward of coins is given in return.

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