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). The cryptocurrency protocol dictates that 21 million bitcoin will be in existence at a particular point. 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 set up in a powerful computer referred to as a node.Because this computer plays a part in the information transfer process, it thus helps keep cryptocurrency running.Some nodes are called miners as they are essentially mining nodes. Their function is to gather good transactions into blocks and include them in the blockchain.
This is done by solving an intricate mathematical problem which comes with the cryptocurrency program, and attaching the answer in the block. The objective is to look a number which, when mixed with the data in the block and passed through a hash function, creates a result that is within a specific range.
Getting the Problem Solved
What should be done to find this number? Believe it or not, it’s all about random guessing. Predicting the output is impossible because of the hash function. 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 comes up needs to begin with a preset number of zeroes. No one can tell for sure which number is going to work, since there can be wildly varying results with two consecutive integers.On top of that, many nonces may produce the desired result, or there may be none at all.
The first miner that gets a resulting hash in the predefined range tells the entire network of its conquest. Others miners will then halt work immediately on that specific block and get started on another.
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. Such is how much time cryptocurrency developers think will be needed to have a steady and decreasing flow of new coins until the 21 million max, which is said to happen within the year 2140.