WTF are Bitcoin miners, & tf do they do? (how do transactions work)
A thread π§΅
A thread π§΅
The term 'miner' confused the fuck outta me too, because the only miners I know are those that dig for gold...and minecraft stuff...
Point is, I didn't know shit about the crypto 'miner' termπ
So, I'm making a thread since I'm pretty sure there has to be someone like meπ
Point is, I didn't know shit about the crypto 'miner' termπ
So, I'm making a thread since I'm pretty sure there has to be someone like meπ
Hopefully, after reading this thread, you'll have a better understanding of what Bitcoin miners do.
This will be like a brief, general overview of what miners do and the mining process!!
Enjoyπ
This will be like a brief, general overview of what miners do and the mining process!!
Enjoyπ
In short, miners mine blocks.
WTF does that mean?
It means that they take transactions from the mempool (waiting room for transactions that have yet to be included in a block), and confirm those transactions & put them in a block.
WTF does that mean?
It means that they take transactions from the mempool (waiting room for transactions that have yet to be included in a block), and confirm those transactions & put them in a block.
Miners confirm these transactions by solving really difficult cryptographic algorithms.
This is because every transaction is cryptographically secure.
This is because every transaction is cryptographically secure.
Everyone has an equal chance to solve this cryptographic algorithm because there's no special program or software that speeds up the process or some shit like that.
Also, the probability of solving this algorithm is similar to the chance of hitting bulls eye on a dart.
Also, the probability of solving this algorithm is similar to the chance of hitting bulls eye on a dart.
Why do miners mine?
Miners get economic incentive from mining a block + transaction fees.
This said, miners benefit from choosing bigger transactions to include in the block rather than smaller ones.
Big transaction = big transaction fees = economic incentive
Miners get economic incentive from mining a block + transaction fees.
This said, miners benefit from choosing bigger transactions to include in the block rather than smaller ones.
Big transaction = big transaction fees = economic incentive
This means that smaller transactions usually take longer to process than bigger ones.
Sometimes, small transactions get stuck in the mempool, so there's ways to accelerate Bitcoin transactions.
This is called fee bumping.
One example of fee bumping is 'Child Pays For Parent'
Sometimes, small transactions get stuck in the mempool, so there's ways to accelerate Bitcoin transactions.
This is called fee bumping.
One example of fee bumping is 'Child Pays For Parent'
In 'Child Pays For Parent' fee bumping technique, you pay a high fee (child transaction) to incentivize miners to also confirm the unconfirmed transaction (parent transaction)
TLDR; the child transaction is compensating for the parent transaction so that both are confirmed ASAP
TLDR; the child transaction is compensating for the parent transaction so that both are confirmed ASAP
Miners also get economic incentive from mining blocks.
Mining a block gets you a reward of 6.25 BTC. After every 210,000 blocks mined, the block reward is cut in half. This is called halving.
In this case, after 210,000 blocks are mined, the block reward will be 3.125 BTC
Mining a block gets you a reward of 6.25 BTC. After every 210,000 blocks mined, the block reward is cut in half. This is called halving.
In this case, after 210,000 blocks are mined, the block reward will be 3.125 BTC
I think halving is done to avoid inflation (correct me if I'm wrong)
Also, as you know, Bitcoin has a supply cap of 21 million. Once that supply cap is reached, there won't be more block rewards for miners.
Miners will then get economic incentive from only transaction fees.
Also, as you know, Bitcoin has a supply cap of 21 million. Once that supply cap is reached, there won't be more block rewards for miners.
Miners will then get economic incentive from only transaction fees.
Thanks for making it this far!!π
If you enjoyed this short thread, check me out @codingyuri β€οΈ
I tweet about what I learned, random shit, blockchain, & web devπ
Also, join me on the Ponder app if you're interested on crypto/blockchain talk !!
getponder.com
If you enjoyed this short thread, check me out @codingyuri β€οΈ
I tweet about what I learned, random shit, blockchain, & web devπ
Also, join me on the Ponder app if you're interested on crypto/blockchain talk !!
getponder.com
Loading suggestions...