Chapter 2
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
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 Chapter 1.) In this chapter, we explore how cryptocurrencies use mining to create trust and make the cryptocurrency usable, stable, and viable.
Understanding Decentralized Currencies
Cryptocurrencies are decentralized — that is, no central bank, no central database, and no single, central authority manages the currency network. The United States, for example, has the Federal Reserve in Washington, the organization that manages the U.S. dollar, and European Central Bank in Frankfurt manages ...
Get Cryptocurrency Mining 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.
