How to mine Ethereum, guide for beginners.

Discussion • 2020/12/29 • par

To put it simply, cryptocurrency mining is a process of solving complex mathematical problems. Miners are essentially the cornerstone of many cryptocurrency networks as they spend their time and computing power to solve those math problems, providing a so-called “proof-of-work” for the network, which verifies Ether (ETH) transactions. Besides that, miners are responsible for creating new Ether tokens through this process, as they receive rewards in Ether for successfully completing a PoW task.

PoW relies on fundamental properties of the hash function, an “encrypted” piece of data that is procedurally derived from some arbitrary input. The difference between hashes and standard encryption is that the process only goes one way. The only meaningful way to find what input was used to generate a given hash is to try to hash all possible input combinations and see which one fits. This is further complicated by the fact that tiny alterations in initial data will produce completely different results.

Proof-of-work starts by designating a list of desired hashes based on the “difficulty” parameter. Miners must brute force a combination of parameters, including the previous block’s hash, to create a hash that satisfies the conditions imposed by difficulty. This is an energy-intensive task that can be easily regulated by turning difficulty higher or lower.

Miners have a certain “hash rate” that defines how many combinations they try in one second, and the more miners participate, the harder it is to replicate the network for outside entities. By putting real work in, miners secure the network.