Cryptocurrency mining

In the decentralized consensus process that takes place in the p2p network in order to validate user transactions and prevent double spending from being included in the block chain, the nodes in the network are rewarded with blocks of coins digital You can think of this as a payment to the node in exchange for the service to create a block in the consensus chain.

This compensation is an incentive for the nodes of the p2p network to behave honestly. Being the behavior of the honest nodes always extend the chain of validates longer, where it is assumed are the valid transactions, not those of double spending. The protection against double spending is purely consensual. It is the consensus that determines which transaction ends in the longest valid consensus chain.

BITCOIN MINING
According to Bitcoin rules, the node that creates a block can include a special transaction in that block: a coin creation transaction (coinbase). In addition, the node can also choose the recipient address of this transaction, which, of course, will be its own. To create a block, the node that proposes that block is forced to get a unique arbitrary number or nonce that successfully solves a hash puzzle.

The hash is a mathematical problem that seeks that the hash of the block to be created is within a target space, which defines the difficulty of mining and depends on the total processing of the network. To solve this conundrum it is necessary to get a unique arbitrary number or nonce that by concatenating it with the hash pointer of the previous block and the transactions that the node proposes that the block contains and applying the hash function, makes that the objective condition is met.

The target space is adjustable to allow the difficulty of the puzzle to be changed over time as new users enter the network or old users leave it, modifying the total processing amount of the network. This allows the puzzle to be difficult enough for blockchain attacks to be costly, but riddle solutions can still be found at an almost fixed rate (in the case of Bitcoin, around ten minutes).

The process of achieving the nonce that solves the hash puzzle is what is known as bitcoin mining, within which the distributed consensus operations explained above take place. The mining riddles are in the very core of Bitcoin.

The random selection of the authorized node to create a new block is solved by means of the mining system called Proof-of-Work. The key idea behind Proof-of-Work is that you can approximate the selection of an arbitrary node to, instead, the selection of nodes in proportion to a resource that we hope no one can monopolize. If, for example, that resource is computing power, then it is a Proof-of-Work system. Alternatively, it could be in proportion to the ownership of the coin, and it is called Proof-of-Stake. Although not used in Bitcoin, the Participation Test is a legitimate alternative mining model and is used in other cryptocurrencies.

All these systems seek to achieve decentralized consensus and the prevention of double spending and 51% attack. Depending on the type of system that uses the cryptocurrency, it will change the way it is mined.