What are CRYPROCURRENCIES actually?
If you carry away all the sound nearby cryptocurrencies and lessen it to an easy precision, you realize it to be just finite entries in a database so anyone can't change without attaining specific requirements. It may look like usual, but believe it or not: this is sure how you can explain a currency.
Take the money to your bank account: What is it more than entry records in a database which can be exchanged below specific requirements? You can even catch actual coins and notes: What are they else than finite entries in a general physical database that can only be changed if you combine or link the condition than you physically own the coins and notes? Money is all about an authentic entry in some database of balances, accounts and transactions.
How do miners make coins and verify transactions?
Let us have a sharp look at the technique reigning the directories of cryptocurrencies. A cryptocurrency like bitcoin comprises a vast web of peers and every peer has the complete data history of all transactions as well as the balance of every account.
A transaction is a fundamental public key cryptography. A transaction is transmitted in the network, sent from one peer to every other peer after signing. This is called primary peer to peer technology and nothing special at all again.
The transaction is generally known almost directly by the entire network. But it gets certified only after a specific amount of time.
In cryptocurrencies, confirmation is a vital concept. So cryptocurrencies are all about vital confirmation.
In as much as a transaction remains unconfirmed, it is uncertain and can not be established. So a transaction is put in stone when it is confirmed. It is no longer fake now that's why it cannot be inversed because it is part of the permanent record of authentic transactions of the nominal blockchain.
So it is miners' job to confirm transactions in a cryptocurrency-network. They use transactions, mark them as legal and publicize them in the network. Every point has to connect it to its database after a confirmation transaction by a miner. It has become part of the blockchain.
Then the miners get rewarded with a token of the cryptocurrency for this job, for example with bitcoins.
What are the miners doing?
Generally, everyone can be a miner. Since a decentralized network has no power to delegate this charge, a cryptocurrency needs techniques to stop one reigning party from misusing it. Just imagine if someone makes thousands of peers and widens fake transactions. The system would automatically go down.
Satoshi set this rule that the miners have to spend some time on their computers to allow for this task. Actually, they have to get a product of a cryptographic function that joins the new block with its predecessor. This is called real proof of work.
