CryptoCurrency Miners: Who are they?
If we talk about CryptoCurrency miners then anybody can be a miner. Decentralized network can not authorize to delegate this task. A mechanism of Crypto currency is required to prevent one ruling party from abusing it. Can you imagine if someone creates hundreds of peers and spreads forged transactions all over. This crypto currency system would break immediately.
Keeping this thing in his mind, Satoshi thought a lot and then he set this rule that the miners of crypto currency will have to invest some work of their computers to qualify for this task. In simple words, miners have to find a hash – it is a product of cryptographic function – this connects the new block with the predecessor. All this work is called the Proof-of-Work. In the system of Bitcoin, it is based on the SHA 256 Hash algorithm.
CryptoCurrency Miners used system
Here you don‘t really need to understand the details of SHA 256. The main thing that you must know is that it is basis of a cryptologic puzzle the cryptocurrency miners need to solve. A miner can build a block in chain and add it to the blockchain, (a bitcoin wallet is also named as blockchain) after finding the solution. After that he has a right to get an incentive, to add a so-called coinbase transaction. What it will do? it gives him a specific number of Bitcoins. This is the simple and single way to create valid Bitcoins.
The cryptocurrency miners solve the cryptographic puzzle then they can create Bitcoins. If the puzzle is difficult then it will increase the amount of computer power that miner invest. There is only a specific amount of Crypto Currency tokens that can be created in a stipulated time period. This is part of the consensus no peer in the network can break.
Revolutionary properties of Crypto Currency
Keeping this thing in mind, if we talk about Bitcoin, decentralized network of peers. This decentralized network keeps a consensus about accounts and balances. It is actually number of currency than the numbers you see in your bank account. What are these numbers in a database? This is a database that can be changed by those people to whom you can’t see and don‘t know?
If we Describe the properties of Crypto Currencies then we require to differentiate the transactional and monetary properties. But we see that most of Crypto Currencies share common sets of properties.
Bitcoin uses a proof of work system. It is a distributed timestamp server as a peer-to-peer network. This system of work is also called as bitcoin mining that cryptocurrency miners do. In this procedure, the signature is discovered rather than provided by knowledge. This process requires a lot of energy. A cryptocurrency miner can bear more than 90% of his operating costs of electricity. In the country of China, there is a data center, they are planning mostly for Bitcoin mining. This mining of Bitcoin is expected to require up to 135 megawatts of electricity.
Satoshi Nakamoto’s Key Innovation
It is Satoshi Nakamoto’s key innovation that requires a proof of work to provide the signature for the blockchain. The identity of block is a part of mining process, when hashed twice with SHA-256, it yields a number smaller than the given difficulty target.
Timestamp network for the bitcoin: it is a valid proof of work that can be found by incrementing a nonce until a value is found. It gives the block’s hash, the required number of leading zero bits. After that, hashing produce a valid result. The block cannot be changed without repeating this work.