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Here’s what you don’t know about cryptocurrency mining

Here's what you don't know about cryptocurrency mining

Written by : joel nzoda on Digilah (Tech Thought Leadership)

Bitcoin transactions are secured. To this end, miners perform mathematical calculations for the Bitcoin network with their computer equipment.

As a reward for their services, they collect the newly minted bitcoins along with the fees from the transactions they confirm. It is halved approximately every four years. On May 11, 2020, this reward increased to 6.25 bitcoins per block.

Miners (or miners’ cooperatives ) are in competition and their income is proportional to the computing power deployed.

“To describe mining, one could use the example of a gigantic sudoku contest where participants start a new grid as soon as someone finds a solution, and whose difficulty adjusts so that on average a grid is resolved every ten minutes. Imagine a giant sudoku grid, with several thousand rows and columns. It would be quite easy to verify that a completed grid is well filled. But […] it will take a lot of work to finish it! The difficulty of the grids can be adjusted by changing their sizes […], but they can still be checked easily even if they are very large. The puzzles to be solved in the bitcoin network are based on cryptographic hashes and have the same characteristics as these sudoku grids: they are very difficult to solve but it is very easy to verify that a solution is correct, and their difficulty can be adjusted. –Andreas M. Antonopoulos.

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