Are you aware of bitcoin mining?

Bitcoin mining is the type of process by which valid blocks have been created that track all the records of Bitcoins public ledger which is called the blockchain. It is a necessary and crucial factor of the bitcoin network online, as it solves the so-called double-spend problem.

The double-spend problem is the issue of needing to find a consensus on a history of all the bitcoin transactions. The ownership of users on online bitcoins can be proved mathematically by the public key cryptography that cannot be broken with present-day technology. However, cryptography cannot guarantee you that a particular coin had not previously been sent to some other individual. In order, if you want to form a shared history of bitcoin price, then you are required to have an agreed-upon ordering. The time at which each bitcoin transaction is created at any kind of external input can be easily manipulated by who so ever provides that, which requires users to trust the third party.

Bitcoin mining

The mining of bitcoin leverages economic incentives to provide a trustworthy factor of ordering data. The ordering transaction of the third party is decentralized and they can receive some of the monetary rewards for their correct behavior. On the contrary to this thing, any misbehavior will ultimately result in the loss of economic resources at least as long as the majority of the users remain honest to this network.

In the case of mining, the results are gained by creating a succession of blockchain that can be mathematically proven to have been stacked in the correct condition with a certain commitment of the resources. The process hinges so the mathematical properties of a cryptographic hash which is a way to encode any of the data in a standardized manner.