Bitcoin is created by a process called mining. The process of mining involves authorizing every transaction over the Bitcoin network and collecting all of them into a block in the network. As the miners confirm and authorize these transactions, they also write them down in a ledger known as a blockchain. A new block is added to the blockchain network whenever a new list of a transaction is made.
How Mining Occurs
All miners compete against each other by making use of a specific software aimed at mining blocks. Once a miner successfully adds a block to the blockchain, 12.5 Bitcoin is gotten as reward and the blockchain network updates. The process of mining involves solving a number of complicated cryptographic puzzles to produce a hash from the collection of transaction data.
The transaction list is updated regularly and all miners have individual copies. The miners make sure that the blockchain is not tampered with by putting every transaction block into hash. A hash is created through a process which involves applying a mathematical formula to the information in the block.n Proof of work is the protocol that makes the hashing process deliberately difficult.
The transaction data in a block cannot be tampered with by miners but the transaction data must be changed when creating a new hash. Random data called nonce is used to create a hash with the transaction data and miners earn bitcoins by finding a nonce that fits the required format. This is what all miners in the network are striving to achieve.
Properties of Hash
- Hash can be produced easily from a collection of Bitcoin transaction data
- It is impossible to get all the transaction information from viewing the hash
- Hash can be produced from all collections of data
- Every hash is unique
- Hash can completely change if one Bitcoin block is changed
- The hash confirms the legitimacy of each block
The hash of a block will change if someone tried to tamper with the already stored block in the blockchain. It is a good way of spotting anything illegitimate as the hash will always be different if it was tampered with. This will subsequently make the next block change too and this change will continue until everything is out of place.
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