Proof of Work

Mining is the process by which participants in the Bitcoin network validate transactions and create new Bitcoin. In the original process, the Proof-of-Work method that’s used in Bitcoin, miners run specialized hardware capable of doing fast calculations needed to solve the puzzle that completes block production. 

A block is a collection of transactions bundled together and timestamped, along with cryptographic proof to link it in a chain of similar blocks. Miners around the world independently bundle a set of pending transactions to be added to the chain history and begin a race to have their block candidate chosen. Since producing new blocks pays out handsomely, 6.25 Bitcoin equivalent to $281,000 every ten minutes, miners compete with one another to solve a cryptographic puzzle with their specialized machines. 

To get chosen, a miner runs incredibly fast ‘guessing’ machines that attempt to determine correct answers in a hashing contest. The more guesses a miner can make per second, the greater the hashpower, the more likely they’ll guess the correct hash and get rewarded with fresh coins.

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