If you've been in digital currency for a while, you've probably heard the words 'Mining' or 'Miner'. If you are interested in the process of extracting cryptocurrencies we recommend that you read this article.
Have you ever wondered what the process of
extracting cryptocurrency is like? Or how are your cryptocurrency transactions
verified and added to the blockchain? To answer this question, we first need to
look for a simple definition of mining.
Mining or cryptocurrency mining
The process of authenticating transactions by
a computer and then adding them to a long, public list called a blockchain that
includes all other transactions is, called "mining" or cryptocurrency
mining .In fact, cryptocurrency mining is the process by which transactions
between users are verified and added to the blockchain general office.
The mining process is also responsible for
introducing new coins into the existing stream, enabling cryptocurrencies to
operate as a decentralized peer-to-peer network without the need for a central
authority.
Individuals in cryptocurrencies receive
cryptocurrencies as a reward by performing mining processes. It is interesting
to know that anyone with a computer and Internet access can become a miner. But
this is not the whole story!
What do miners do?
Miners perform important operations such as
solving math problems to verify other users' transactions over the Internet in
the blockchain network.
They protect blockchains from scams and
hacker attacks and ensure network decentralization. But you should know that
the mining process, although easy, is not always profitable. Depending on a
number of factors, such as which cryptocurrency you are mining, how fast your
computer is, and the cost of electricity in your area, the cost may ultimately
be more than the profit.
How is the process of mining cryptocurrency?
We explain the process of mining cryptocurrency
in seven steps:
1.
A user makes a transaction
through the cryptocurrencies in her/his wallet and tries to send her/his
digital asset or token to someone else anywhere in the world.
2.
The transaction is
announced through the wallet program and at that moment it waits for a miner to
be selected on this blockchain. This transaction is suspended in the
"Unverified Transaction Pool" until Miner selects it. This pool is a
collection of unverified transactions on the network awaiting processing.
Unapproved transactions are not usually collected in one large pool, but most
are in several small classified pools.
3.
The miners in the network,
also called nodes, select transactions from these pools and form them into a
"block". A block basically contains a set of transactions that does
not currently include unverified transactions, in addition to some additional
information such as digital signatures, timers, and so on. Each miner creates its
own block of transactions, and several miners can choose the same transaction
to be included in their block. For example: Consider miners A and B, both
miners A and B can decide to include transaction X in their block. Each blockchain
has its own maximum block size. In the Bitcoin blockchain, the maximum block
size is 1 MB. Before adding a transaction to their blockchain, miners should
check whether the transaction is eligible for execution based on the blockchain
properties. If the sender's wallet balance is sufficiently budgeted,
given the records in the blockchain, the transaction is considered valid and
can be added to the block. Miners usually prioritize a transaction that has a
high transaction cost, as this will provide them with a higher reward. This
happens when the number of blockchain network transactions is so large that all
miners are busy and the transactions have to wait longer to be approved. At
this time, the user who intends to perform the transaction can increase his fee
and place his transaction in the priority of miners.
4.
Miners create a block of
transactions by selecting transactions and adding them to their block. They
need a signature in the blockchain to add this block of transactions. This
signature, also known as "proof of work", is made by solving a very
complex mathematical problem and is unique to each block of transactions. Each
block has a different math problem. So each miner will work on a different problem
specific to his block. Each of these problems is so difficult to solve that it
requires a lot of computing power and a lot of electricity. This is the process
called mining. This is where the power of your computer plays a very important
role in the amount of rewards you receive.
5.
A miner who can find the
first eligible signature for its block will publish this block and its
signature to other miners.
6.
Other miners must now
verify the signature using the scattered block data and check whether the
output hash matches the existing signature. If it matches, other miners will
validate it and as a result this block can be added to the blockchain. In fact,
the miners reach a consensus that they all agree on, hence it is called the
"consensus algorithm". In fact, the signature is the proof of the
work done and the computational power used to solve the mathematical problem.
This block can now be added to the blockchain and sent to all other nodes on
the network. Other nodes also accept this block and store it in their
transaction data as long as the transactions in the block correctly match the
current wallet balance - the transaction history - at that time.
7.
After a block is added to
the blockchain, any other block that is added after it is considered
"confirmation" for that block. For example, if your transaction is
registered in block 695 and the blockchain has 700 blocks, it means that your
transaction has 5 confirmations (695 to 700). The reason it is called
confirmation is that every time another block is added after it, the blockchain
again completely agrees on the transaction history - including your transaction
and your block. As a result, you can say that your transaction has been
verified five times by blockchain. This is exactly what the
"Etherscan" or "BSCscan" site refers to when showing your
transaction details. The more verified your transaction is, that is, the deeper
a block is in the chain, the harder it will be for hackers to change it. After
a new block is added to the blockchain, all miners must restart from the third
stage and form a new block of transactions.
We hope you find this post useful.
Comments
Post a Comment