What Is Cryptocurrency Mining?
Hearing about cryptocurrency mining, you picture coins while they are pulled out of the ground. But knowing that cryptocurrency is nothing physical, why do we say mining?
Because it’s like gold mining, with bitcoin existing in the protocol’s design (as you would find gold underground), except that they haven’t been exposed to the light yet (gold that hasn’t been extracted). According to the cryptocurrency protocol, there will be 21 million bitcoin at each specific time. Miners get them out gradually and in sets.They will be given the chance to do this as a reward for building blocks of validated transactions and inserting them in the blockchain.
Cryptocurrency software is run on a specially designed computer called a node.Because this computer plays a part in the information transfer process, it thus helps keep cryptocurrency running.Some of these nodes are mining nodes, and they are often called miners. They work by grouping outstanding transactions into blocks and adding them to the blockchain.
The process requires solving a difficult math problem that comes as part of the cryptocurrency program, after which the answer will be added to the block. The goal is to determine a number that, in combination with the data in the block and after going through a hash function, will bring a result that lies within a predefined range.
Solving the Problem
? By making random guesses. Because of the hash function, output predictions are completely impossible. Thus, miners just guess the unknown number, on which the hash function to that number combined with the block data will be applied.
The hash that results must start with a pre-defined number of zeroes. Knowing the exact number that will work is just plain impossible, as you can never tell which number will work, considering that two consecutive integers can produce wildly varying results.Moreover, there can be a lot of nonces that lead to the intended result, or there can be none.
The first miner that gets a resulting hash in the predefined range tells the entire network of its conquest. Others miners then automatically stop work on that particular block and start working on the next one.
The triumphant miner then receives some new cryptocurrency as a prize. With the difficulty of the calculation (the needed number of zeroes at the start of the hash string) is changed from time to time, processing a block is going to take around 10 minutes. This is how long cryptocurrency developers think is needed for a constant and decreasing flow of new coins until the 21 million maximum mark (projected to happen in 2140).