From the course: Cryptocurrency Foundations
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The cryptocurrency mining process
From the course: Cryptocurrency Foundations
The cryptocurrency mining process
- When paying someone by conventional means, you might be handing over cash, say, notes and coins. Once you make payments, you no longer have the physical money. If you're paying from your bank account, you're instructing the system to move your money to another account. The financial system infrastructure takes care of validating that money is available and then moves it. All accounts are kept up to date. Since cryptocurrency is entirely digital and there is no central management, we need another process to ensure that all transactions are managed and kept current. This is where mining plays an essential role. In fact, mining has two important purposes. First, mining is used to validate transactions. And second, it's a way in which new cryptocurrency is introduced. Mining is a role that anyone can choose to perform in a blockchain network. Most don't; it's a niche responsibility on most blockchains. The motivation to…
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