Who are miners? Everything You Need To Know About Miners
Miners can be defined as accountants who records every transactions to the blockchain. The concept is simple, a proof of payment is important if you want your payment to be valid.The miners are the ones who keep the record of your payment. Hence they are record keepers who keep the system updated of new payments and existing ones.
How do they work?
When you issue a payment to someone in bitcoin, you are actually announcing that you want this many bitcoins transferred to another account. Then announcement is made by payee to the blockchain network.
The nodes in the network makes note of this announcement and cross checks the payment with every transactional data on the network. This is done by checking if the user has used the same coin in other transactions at the same time. Hence this process successfully eliminates double spending. If there are no matches, then the nodes will announce this transfer to the miner network.
Now the miner’s task is to add the transaction to the blockchain. But if all the miner add the transaction to the blockchain at the same time, there will be, multiple records of the same transaction.
So what miners do is race each other to verify a block. Before they can enter a block, the must solve it. The blocks are encrypted with an encryption code that works on SHA-256 algorithm. This encryption is called a hash. So if you want to solve and add a block you need to solve the encryption by entering the correct key.
The miners actually figure out this key with pure guess. But they don’t have to do it themselves! The computers processing power is used to come up with the answer for the encryption. So the computers come up with a series of different combination to fit the encryption.
So the more processing power you have, the more will be your chances of cracking a block and adding it.
The first miner to solve the hash or the encryption call add the block to the existing blockchain. Once the nodes on the network accept the new block, the payment gets confirmed.
Once a block is added to the network, the miner receives several bitcoins and a small sum as reward for the time and resources he or she had vested into the mining process. Hence the miners won’t lose motivation for mining as fast as they can for the next transaction.