The method by which Bitcoin and other crypto generate new coins and validate new transactions is known as mining. Mining is the process through which crypto transactions are gathered, verified and recorded into a blockchain. The work done by miners is essential for maintaining the integrity of the network and is also responsible for to introducing new coins into the system.
The job of a miner is the gather unconfirmed transactions from the memory pool and organise them into a candidate block that they will try to validity after a list of unconfirmed transaction is formed. Each transaction is hashed and their output is paired. These pairs are then hashed producing new output and they are hashed once again. The process is repeated until a single hash is produced; which is the root hash. The root hash is then combined with the previously confirmed hash along with the pseudo random number called Nonce. The process has to be done multiple times and trial & error is used.
It entails massive, decentralized networks of computers all over the world that verify and safeguard blockchains, which are virtual ledgers that record bitcoin transactions. Computers on the network are rewarded with fresh coins in exchange for contributing their processing power. It’s a virtuous circle: miners keep the blockchain secure, the blockchain rewards coins, and the coins incentivize miners to keep the network secure.
“Mining” is performed using sophisticated hardware that solves an extremely complex computational math problem. The first computer to find the solution to the problem is awarded the next block of bitcoins and the process begins again.
