In a Proof Of Work scheme, block reward, as the name implies, is given to the node that successfully mines a block.
Okay Let's break that statement down to their simplest components.
What is a transaction ?
A record of asset transfer ( Ex: I send you 5 ETH ).
What is a block ?
A container that groups transactions.
What does mining refer to ?
Grouping of transactions and adding them to the blockchain. Every mined block must be valid.
So how do we go about determining which block is valid ?
POW schemes ( Ex, Bitcoin, Eth ), require some kind of proof that you've put the required work. A proof that must be difficult to generate but easy to verify. This is where hash functions come in.
How do we reward miners for their hard work ?
Upon the successful mining of a block, the miner gets rewarded certain number of blockchain assets. In Bitcoin, it started with 50 BTC. Now it's 12.5 per block.
In addition, miners also receive transaction fees.
Where does block reward come from ?
The blockchain creates it out of thin air. It's just a number in a ledger.
Thanks!!
Interesting read! Keep up the good work!
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit