This unreliable, public ledger process is known as mining. Beneath the network of Bitcoin users trading digital currency among themselves is a network of miners that record these transactions on the blockchain.
Recording a series of processes will be an unimportant task for a modern computer. But mining is difficult because the Bitcoin software artificially makes the process time consuming. If there weren't an added challenge, people would fake transactions to enrich themselves or bankrupt others, meaning that after recording a fraudulent transaction on the blockchain, they would record so many trivial transactions on it that it would be impossible to resolve the fraud.
Likewise, it would be easy to add fraudulent transactions to past blocks. The network could be turned into a spam-like mess of competing ledgers and spreads over account logs. As a result, Bitcoin could be devalued.
Satoshi’s breakthrough was to combine “Proof of Work” with other cryptographic techniques. Bitcoin software adjusts the difficulty to limit the network to a new 1 megabyte transaction block every 10 minutes, at each miner's disposal. In this way, the throughput can be digested. The network has time to review the new block and the ledger before it, and anyone can agree on the status quo. Miners don't work to validate transactions by adding blocks to the distributed ledger (just out of the desire to see the Bitcoin network running smoothly). Miners tend to get paid for their work.
- CandleFocus Editor
Mining