What are Miners?

Miners

Cryptocurrency Miners: The first question often asked is, what is a miner’s role and how do they verify transactions while finding new crypto?

Here is a simple example of what a miner does.

Studying the above image (before bitcoin) you may have noticed between the sending bank and receiving bank there are processing companies. All of these companies have to maintain a ledger which is usually done by an accountant or finance director. Therefore, the finance director is entitled to a salary for the work he does. The finance director’s salary is generated from the commission the bank charge.

In the case of miners, they do the same role as an accountant. Transactions are maintained on the ledger by the Miners.  The miners have two purposes, one is to find blocks of new bitcoins. This medium is in effect the same as the central banks creating new banknotes. The second part of a miner’s role is to maintain the ledger.

What is a Ledger?

A ledger confirms transactions between two parties and updates the necessary balances. In the below example, one person has £1000 and the second user has 1 Bitcoin for sale. The role of the ledger is to update the transfer of funds to another.

The role of Miners can be seen below by maintaining the ledger.

User 1 User 2
Stage 1 BTC = 0 and £1000 BTC = 1 and £0
Stage 2 BTC = 1 and £0 BTC = 0 and £1000

 

Because of this service, the miners receive bitcoins. The coins can list to sell on exchanges like XCH4NGE or keep for themselves.

Miners help to create a decentralised platform.  This medium is to ensure no one single institution controls the bitcoin network. A group of volunteer coders maintains the framework. These volunteers assist in creating an open system of dedicated mining computers spread around the world. As a result, it makes mining a key role to maintain decentralisation.

Mining Equipment

Mining equipment has become big business over the last three years. An example of a mining equipment company is BITMAIN who is the most significant producer of ASIC miners in China and has well over a billion dollar turnover. Some crypto allows for mining with ASICS such as bitcoin while others use traditional GPUs for mining. The leading two providers for GPUS are NVIDIA and AMD who have both taken advantage of the mining boom.

Mining Rewards to Money

One of the greater issues miners face is to pay bills when needed. With this in mind we have created a system and a dedicated team for miners who need assistance in disposing of coins for fiat currency.

You can read more here: Exchanging Fiat for Miners