Can you explain in simple terms what a bitcoin mine is?
I am still a regular cryptocurrency but I know that Bitcoin mining is the production of additional Bitcoin under BlockChain Technology.
In Bitcoin and other blockchain technologies, mining is the way new transactions are added to the blockchain and secured. There is a financial incentive for miners to do this because each time they dig a block, they receive fewer blockchain payments (Bitcoin, Litecoin, Ethereum, etc.).
In traditional fiat currency systems, governments simply print extra money when they need it. But in bitcoin, money is not printed at all — it is available. Computers all over the world do not ‘stand’ with coins in competition.
People send bitcoins to each other through the bitcoin network all the time, but unless someone keeps a record of all these transactions, no one will be able to track who paid for that. The bitcoin network deals with this by collecting all transactions made on a timely basis in a list, called a block. It is the miners’ job to verify the purchase and to record it in a standard book.
This common judge is a long list of blocks, known as ‘blockchain’. It can be used to track any transactions made between any bitcoin address, at any time on the network. Whenever a new transaction block was created, it was added to the blockchain, creating a longer list of all payments ever made on the bitcoin network. A regularly updated copy of the block is provided to everyone involved so that they know what is going on.
But a standard book should be trusted, and all of this is done digitally. How can we be sure that the blockchain remains the same, and has never been disrupted? This is where the miners come in.
When a block of transactions is created, miners put it into practice. They take information from a block, and apply a mathematical formula to it, turning it into something else. The other is a very short sequence, which appears to be randomly assigned to letters and numbers known as a hash. This hash is stored along with the block, at the end of the blockchain at that time.
The bitcoin protocol will not just accept any old hash. It requires that the hash of the block have a certain look; it should have a certain zero number at the beginning. There is no way to predict what a hash will look like before you produce it, and as soon as you add a new piece of data to the compilation, the hash will be completely different from cryptocurrency exchange online.
Miners should not interfere with local data but should modify the data they use to create a unique hash. They do this using another random piece of data called ‘nonce’. This is used with custom data to create a hash. If the hash does not match the required format, the nonce is replaced, and everything is speeded up again. It can take a lot of effort to get a working nonce, and all the miners in the network are trying to do it at the same time.
Bitcoin notes use a blockchain to separate official Bitcoin transactions from attempts to reuse coins that have been used elsewhere.
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