What is Ethereum Mining?
By now, you must be familiar with cryptocurrencies, and the way they’re empowering people to make transactions anonymously and securely online, right? If not, then you will be soon enough, as many believe cryptocurrencies are going to be at the heart of our lives over the next 10 years and beyond.
There are a multitude of variants in the field of virtual money, and each one serves a similar, but unique purpose. New ones are emerging frequently, as people attempt to make financial gain from all the attention the industry is receiving. But, there are two forms which are the backbone of the blockchain – Bitcoin and Ethereum.
Within this post, we’re going to discuss Ethereum, and how the mining process allows the decentralized platform to continue operating optimally.
Why is mining necessary?
As cryptocurrencies aren’t physical forms of money – rather just code sent across the internet – there needs to be a way of recording every transaction. The technology which houses all of the Ethereum transactions is the blockchain. The individual miners are the ones who ensure the transactions are tamper-proof and stored correctly.
If it weren’t for miners continuously adding Ether into the community for people to utilize, verifying blocks diligently, and preventing fraudulent activity, the network would quickly die out and become unusable. So, while miners do work for financial reward, they also desire to help maintain and grow the Ethereum platform.
How does it work?
In a nutshell, someone will use the power of their computer to solve complex equations to discover, unlock and validate a new block, which is then immersed into the blockchain.
But, if we delve a little deeper, there’s much more to it than that. The process works on a proof-of-work basis, meaning a miner will only be rewarded for their work if they can prove that they’ve solved the equation.
It’s impossible to cheat or take shortcuts when mining Ether. If you don’t display that you’ve solved the equation, deciphered the block, added it to the blockchain, or stored a record, then you won’t be rewarded.
When a miner begins, they’ll typically run the block through a hash function, which will return a randomized sequence of numbers and letters, that then needs to be deciphered. To make sure every single Ether isn’t found instantaneously, the Ethereum network adjusts the difficulty of discovering blocks when it sees fit. The aim is to have a block uncovered by a miner approximately every 12 seconds.
Without Ethereum miners, this form of virtual finance would be worthless and quickly die out.