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.
Bitcoin
bitcoin miner
block
blockchain
Crypto terms
cryptocoins
mining
Stable Cryptocurrencies
trader
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