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What miners do and why they are needed
If the blockchain network acts as a third party in the transfer of value, then, like a banking system, the network has a support staff, in blockchain this staff is “Nodes”. – software code installed on special hardware, and the people who own and maintain such systems are miners.
To perform a transaction in a blockchain, it must be created and placed in a mempool – a special accumulator that collects transactions waiting to be added to the block and chain.
What miners do?
The miners connect to the mempool and start processing all the transactions in the queue. If you look at the process globally, it looks like this: the system learns about all the transactions in the mempool, processes them, writes to the block, and calculates the hashes. To confirm that the block is correct, a miner needs to submit a solution to the network, which is checked by other miners and, if all is well and most participants accept the result of the hash calculation, the block is considered correct and is then added to the blockchain.
It turns out that to add a new block, all participants in the network need to agree, and if the majority of miners support the decision and agree with it, the block appears in the network. That is, the blockchain needs a consensus or decision supported by the majority. That is what miners do, getting a reward from the network for their work.
There are two main types of mining: proof-of-work and prood-of-stake, but most blockchain projects now work on the proof-of-work principle, which is why miners need highly efficient and productive equipment.
How do transactions in blockchain happen?
In order to make a bank transfer, a user needs to open an account using his personal data, deposit funds into it, and only then can transactions be made, which in addition must meet the requirements of the financial institutions I mentioned above.
To make a transaction in the blockchain, the user needs only two keys: a Public Key and a Private Key.
“Public Key” is a set of numbers and symbols available for anyone in the bitcoin network to view – this is the number of the wallet, its address used to transfer funds.
The “private key” is the most valuable. It is used to sign all transactions in the wallet, so it should be carefully kept in a safe place.
All information encrypted with a user’s private key can be decrypted by anyone using their public key, but they cannot open a wallet or transfer funds. Thus it is possible to find out information about every transaction of any account, such a system is completely transparent, but it is also anonymous because blockchain does not store any personal information and it is difficult to identify the owners of private keys.
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