Cryptocurrency and Its Essentials
When you hear the words, cryptocurrency mining, you envision coins being extracted from the ground. But because cryptocurrency is something physical, why should we even refer to it as 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. The task of miners is to get them out, not at once but a few at a time.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.This computer plays a part in the delivery of information and, in part, in keeping the cryptocurrency going.Some nodes are called miners as they are essentially mining nodes. 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 idea is to discover a number which gives an outcome in a particular range when it is incorporated into the data in the block and goes through a hash function.
Getting the Problem Solved
How can this number be determined? Believe it or not, it’s all about random guessing. Predicting the output is impossible because of the hash function. Therefore, miners just take a wild guess at this all-important number and run the hash function on that number and the data in the block.
The hash that comes up needs to begin with a preset number of zeroes. It is impossible to know which number will actually work, as results can very widely with any two consecutive integers.On top of that, many nonces may produce the desired result, or there may be none at all.
As soon as a miner has obtained a resulting hash within the intended range, it will announce its victory to the whole network. At his point, other miners will instantly stop work on that certain block and begin with the succeeding one.
The victorious miner receives some new cryptocurrency as a reward. 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. Ten minutes is the length of time cryptocurrency developers believe is important for a stable and diminishing flow of new coins before the 21 million max (expected to happen in 2140).