Chapter 1
Understanding Cryptocurrency Mining
IN THIS CHAPTER
Making money with mining: transaction fees and block subsidies
Understanding how mining builds trust
Discovering how mining ensures the six characteristics of cryptocurrency
Choosing the winning miner through proof of work and proof of stake
Although not all cryptocurrencies require mining, Bitcoin and other mineable cryptocurrencies rely on miners to maintain their network. By solving computationally difficult puzzles and providing consent on the validity of transactions, miners support the blockchain network, which would otherwise collapse. For their service to the network, miners are rewarded with newly created cryptocurrencies (such as Bitcoin) and transaction fees.
When a miner sends a transaction message across the cryptocurrency network, another miner’s computer picks it up and adds the transaction to the pool of transactions waiting to be placed into a block and the blockchain ledger. (You can find the details about cryptocurrency and blockchain ledgers in Book 2.) In this chapter, we explore how cryptocurrencies ...
Get Cryptocurrency All-in-One For Dummies now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
