Miner - the guarantor of blockchain security

A miner plays a crucial role in the blockchain network as an established participant that ensures the functionality of a decentralized system. In the world of cryptocurrency, the miner's function is somewhat similar to the role of regulatory bodies in traditional banking systems; however, the key difference is that this process is entirely decentralized and automated.

Main Activities of Miners

The miner requests the verification of cryptocurrency transactions and the aggregation of blocks. Their responsibility includes the review of unconfirmed transactions in the memory pool, filtering, selection, and then forming a new block.

Of course, this is not a simple clerical job. The miner is invited to solve a complex mathematical problem that relates to cryptographic hash functions. For each potential block, the miner collects transactions, adding their own coinbase transaction ( which is their original source of income ), and then creates a Merkle tree structure from this aggregated data.

Merkle Tree and Hashing Process

Merkle tree is an important cryptographic structure that eliminates transaction harvesting. The process is clearly described: first, each transaction is hashed (, then pairs are organized and hashed again. This operation is recursively repeated until we obtain only one final value - the root hash.

This root hash has combined the identifier of the previous confirmed block ), the block hash (, and added a pseudo-random value referred to as nonce. This entire combination is hashed again, resulting in the candidate block hash.

Proof of Work - Proof of Work

The success of the miner depends on whether the resulting hash is “small” enough - that is, whether it meets the target value. If the first attempt does not yield the correct hash, the miner changes the nonce value and rehashes the operation. This cycle continues until the correct sum is obtained.

The first miner who proves a valid hash and successfully confirms their candidate block is recognized by the network and receives the block reward. This process takes an average of about ten minutes in the case of Bitcoin. This time interval is primarily regulated by the dynamic adjustment of the network's difficulty.

Block Reward - Economic Incentive

The Bitcoin reward system is defined and predictable. The protocol strictly states that the reward is halved after every 210,000 blocks. Initially, the block reward was 50 BTC, then it was reduced to 25, then to 12.5, and today it is 6.25 BTC. This schedule will repeat strictly until the block reward is eventually generated solely from transaction fees.

Miner of cryptocurrency life storage

The work of miners - proof of work )Proof of Work( - is the mechanism that provides stability and security to cryptocurrency networks. The private structure of the blockchain, where each block depends on the hash of the previous block, makes it practically impossible to alter the history. The work of miners guarantees that each submitted block is genuine and verified by the majority of the network.