Bitcoin Mining Information
Bitcoin Mining Information | What does Bitcoin mining mean?
Bitcoin Mining information | Mining is the activity of spending computing power to process transactions, keep the network secured, and maintain synchronization among its community members. Miners can be active regardless of location and not one miner has control over the network.
You have to see it as gold mining (this is where the name comes from) as it is the temporary manner which is used for issuing new Bitcoins.
The difference with gold mining, besides the obvious of course, is Bitcoin mining gives you a reward in exchange for useful services which are needed to operate a secure payment network. Mining will still be required after the last Bitcoin is issued.
Bitcoin Mining Information | How does Bitcoin mining work?
Anybody can become a Bitcoin miner by running software with specialized hardware. Mining software scans the network and listens for transactions broadcasts through the peer-to-peer network and performs the required tasks to process and confirm these transactions. Bitcoin miners do this job because they are able earn transaction fees paid by users for faster transaction processing, and newly created Bitcoins issued into existence according to a fixed formula.
For new transactions to be confirmed, they need to be included in a block along with a mathematical proof of work. Such proofs are very hard to generate because there is no way to create them other than by trying billions of calculations per second. This requires miners to perform these calculations before their blocks are accepted by the network and before they are rewarded. As more people start to mine, the difficulty of finding valid blocks is automatically increased by the network to ensure that the average time to find a block remains equal to 10 minutes. As a result, mining is a very competitive business where no individual miner can control what is included in the block chain.
Bitcoin Mining Information |
The proof of work is also designed to depend on the previous block to force a chronological order in the block chain. This makes it exponentially difficult to reverse previous transactions because this requires the recalculation of the proofs of work of all the subsequent blocks. When two blocks are found at the same time, miners work on the first block they receive and switch to the longest chain of blocks as soon as the next block is found. This allows mining to secure and maintain a global consensus based on processing power.
Bitcoin miners are neither able to work in a fraudulent way by increasing their own reward or process fraudulent transactions that could corrupt the Bitcoin network. all Bitcoin nodes would reject any block that contains invalid data as per the rules of the Bitcoin protocol which cannot be changed, so the miners maybe are not to be trusted the network is.