Quote:
Originally Posted by svandamme
none of that explains the mining aspect of it.
Which was the real question that was asked.
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I’ll simplify. A lot. Also it’s been a couple of years since I did any blockchain work so this might be a bit flaky - getting old, memory not what it was...
Transactions are recorded in a ledger. Copies of the ledger are written by others to be sure it stays legit. The ledger is divided into blocks.
The person that solves an arbitrarily complex math function gets the right to add the next block and determine what’s written to it. Blocks are created at a fixed rate - every 15 minutes iirc - so for 15 minutes the winner is in charge of the whole deal.
Hashing (the math problem) requires solving a problem millions of times until you get the right answer. It’s called mining because you are searching through lots of answers to find the one nugget of gold that lets you own the block.
The winner gets the right to write transactions to the block.
Which also means the right to pick the transactions that are recorded.
They get paid a certain number of bitcoins for winning. 6.25 iirc.
The transactions pay a fee to be recorded that the winner also gets to keep. When it’s busy the fee goes up, or you wait, so the amount can be significant.
So mining is the act of performing a calculation to get a known answer without knowing the inputs so you can get paid for being first with the right answer.