What's the mining process?

Miners form the backbone of the network. they put computational power towards finding the next block.

Upon finding the block, they will get to take the reward as a way of payment for transporting the transaction data across the network and putting it into the block.

 

To open each block in the first place, you need to solve a problem, this is a mathematical equation.

The miner that solves the problem, gets to open the block, take the reward, and then place the transaction data from the network into the block, lock it up and throw away the key.

 

Different types of mining:

 

Solo:

If there are 10 people (miners) all with an equal amount of computing power on the network, the first person to solve the problem gets the reward.

 

If 1 of the 10 miners had a more powerful system - they will be able to work out the solution to the problem quicker. This gives an advantage to that miner, and therefore more likely to get rewarded more often, as they are doing more work than the other miners.

 

Pool:

This is where miners pool their resources together so they are more likely to find a block and get the reward.

 

Let's say 10 people all with an equal amount of computing power have put their resources together on a mining pool.

This means there is a more likely chance the pool will get rewarded than a solo miner that's not part of the pool.

 

If the pool finds the block by solving the problem, the reward gets split between the miners on that pool.

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