What is the meaning of mining?

Question

Fintech

What is the meaning of mining?
Could you clarify its essence? I am familiar with cryptocurrencies, but do not yet have a good understanding of the process.
Preferably in simple terms.
As I know, mining is the solution of mathematical computational problems.
But, as I understand it, the solution is without a "real" result. For example - password selection by brute force.
There is a customer, there is a performer / performers. There is a real result - the password.
When mining, "bad work" occurs - i.e. gradual solution of the problem (finding blocks), and the more blocks are found, the more difficult it is to mine them.
Why is all this done - in the sense of such a system?
For example, a company may issue shares. As much as you want. Straightaway. And indicate their value.
Or the state - to print any amount of money.
Yes, it has its own peculiarities and consequences.
But the bottom line is that there is no reference to time and there is an owner. Shares, money.
After all, one way or another, the cryptocurrency has an owner. Who created it, supports the network, develops it.
Why didn’t he release candy wrappers, calling them coins and not immediately receive money for them? MMM analogue.

Answer 1

Namely, that the state (the central bank, in fact, is not controlled by the state) can issue as much money as it likes. In fact, wrappers, because money is not tied to any physical equivalent. Because of this, various funny situations arise, such as Black Monday (suicides and hell). Various "crises". Various pressure levers. For example, the dollar exchange rate against the local currency doubles in a week. Have we people stopped working? Stole gold reserves? Ended international contracts concluded for the future? Running out of food supplies? No, they lived as they lived, but they began to live worse. These are all mechanisms of pressure, and the levers from these mechanisms are not in our hands. This includes wars. There are many interesting videos about how the financial world works, look, it's interesting.
As for the cryptocurrency, in fact, these are the same candy wrappers. But solving complex mathematical operations (mining) guarantees us that no one can draw as much money as they want in an arbitrarily short period of time. And even when very large capacities appear, the complexity of the tasks increases and the release of this crypto-money is still quite stable. There is also no central bank at all. Whoever organized cryptocurrencies has no leverage.
From the foregoing, if we compare two candy wrappers, dollars and cryptocurrency, then the second one has a clear advantage.
Well, again, after the general distribution, exchanges appeared and the dependence of cryptocurrencies and dollars appeared. Therefore, additional leverage for changing prices appeared. This, in principle, does not depend on cryptocurrencies, who has all the money in the world (an infinite number of candy wrappers), he can buy the entire cotton crop and raise unrealistic prices. In general, cryptocurrencies should not have been used this way, but we have what we have.

Answer 2

If in simple words:

As I know, mining is the solution of mathematical computational problems.
But, as I understand it, the solution is without a "real" result.

No, not necessarily without real (read about ether , for example).
The point is that servers are needed to keep the network running. The owner of the cryptocurrency can install servers for his own money, and fully control them and the currency. Or he can shout "hey people, run the Moycoin application on your computers." Naturally, there are not many people who want to launch just like that, so they are offered a reward. Then there are smart asses who run 100,500 copies of the program to get 100,500 rewards. Then the programs become quite voracious, so that it makes no sense to run many on one computer. And the miners make a reciprocal move - invent ASIC 'and all sorts, but that's another story.

After all, one way or another, the cryptocurrency has an owner. Who created it, supports the network, develops it.
Why didn’t he release candy wrappers, calling them coins and not immediately receive money for them?

Some currencies actually do this. It's called ICO .

Answer 3

This is just one of the options for independent emission

Answer 4

When mining, "bad work" occurs - i.e. gradual solution of the problem (finding blocks), and the more blocks are found, the more difficult it is to mine them.
Why is all this done - in the sense of such a system?
The meaning of the issue, the creation of new coins during mining -
1. the initial distribution of coins
2. while there are few transactions in the system, miners must be rewarded with something.
Over time, there will be many transactions and miners will receive all the income from commissions.
The meaning of mining itself is such a way to agree between participants in the system who do not trust each other. Proof of work - "proof of work", it is necessary so that it is impossible to change the history of transactions or make a double spend.

After all, one way or another, the cryptocurrency has an owner. Who created it, supports the network, develops it.
Why didn’t he release candy wrappers, calling them coins and not immediately receive money for them? MMM analogue.

This can happen for some cryptocurrencies and some consensus algorithms - for example, proof of authority. In my understanding, such cryptocurrencies do not make any sense in the future. As a temporary solution, they can be used, for example, for mutual settlements between banks.
If we are talking about a network with a normal consensus algorithm and a large number of participants, such as Bitcoin, then it does not have an owner. It is developed by all interested parties, but in order to implement any change, it is necessary to agree with the majority of interested parties - developers of clients, wallets, miners, exchanges, etc.

Answer 5

What is the meaning of mining?
Could you clarify its essence? I am familiar with cryptocurrencies, but do not yet have a good understanding of the process.
Preferably in simple terms.
Bitcoin is a distributed payment network, a peer-to-peer version of electronic money (that is, one where there is no single central server). All transactions are stored in the blockchain - a distributed database duplicated on the computers of all network members. Bitcoin is one of the solutions to the "Byzantine consensus" problem .
The essence of the task of "Byzantine consensus" is the possibility of stable operation of the network even if there are unreliable participants in it. Bitcoin solves this problem with Proof-of-Work. Firstly, all payment transactions are cryptographically signed by the sender, and secondly, network participants verify the validity of signatures and report cases of forgery or double spending. If there is a conflict, then the participants "vote" with the help of calculations. The side that has spent more computing resources during such a "vote" wins.
These calculations are mining.
It is both true and false at the same time. The result is that data has been obtained that has not yet been obtained by other participants in the network.
The complexity does not change with an increase in the number of blocks, but with an increase in the power of the entire network. It is selected in such a way that, on average, the network issues a block in 10 minutes.
In the first paragraph, in principle, there is an answer, I will repeat here: mining is voting. It is understood that if you have more computing power, then it is not profitable for you to cheat, otherwise the price of bitcoin will fall and there will be no point in mining for you. BUT this is on condition that you have more than half of the capacity. But in fact, in order to gain more than half of the capacity, you must first agree with this half. And this is a lot of people with their own interests.
For example, a company may issue shares. As much as you want. Straightaway. And indicate their value.
Or the state - to print any amount of money.
Yes, it has its own peculiarities and consequences.
But the bottom line is that there is no reference to time and there is an owner. Shares, money.
After all, one way or another, the cryptocurrency has an owner. Who created it, supports the network, develops it.
Why didn’t he release candy wrappers, calling them coins and not immediately receive money for them? MMM analogue.

There is no specific question here, but yes, generally speaking, in fact, any currency is candy wrappers, but in order to get money for it, you must first prove that it is worth it. For example, the value of the US dollar is that it is the only currency that can be used to pay taxes in the US. In addition, the United States guarantees that the number of these same dollars will not grow without limit (we will not remember about 2008).
I want to add one more link, however, in English, where the author answers the question "why mining" in an unusual way. The name is provocative, but justified. Why Everyone Missed the Most Mind-Blowing Feature ... - Why no one noticed the most incredible property of cryptocurrencies.
Addition:
More specifically, mining is looking for a nonce such that the block hash is less than target , where target is proportional to 1/difficulty.

block:
- header
- transactions included
- ...
- nonce

SHA-256( SHA-256( block ) ) < target

target ~ 1/difficulty

Answer 6

MMM is a very good comparison ... and the size of the "meaning" is capitalization

Answer 7

Mining is the process of finding new blocks of the chain according to a previously known algorithm (cryptocurrency emission). But the power of the miners is also used to check the validity of transactions, for example, to prevent double spending. Interestingly, if half of the miners disconnect from the network, Bitcoin will not work slower, because their number is redundant. In this sense, many of them do empty work.
Initially, cryptocurrencies were invented to avoid the influence of regulatory authorities (cetrobank, state), but now these authorities are talking about their readiness to release their "controlled" crypto money for the common people.
Compared to stocks, there is an analogue in the crypto world. These are tokens. Anyone can create their own token. The token itself may contain the possibility of receiving deductions from real production or receiving goods. In general, what is enough imagination.
Let's say I came up with a BNZ98 token = 1 liter of AI-98 gasoline at a gas station. I release it for sale at 40 rubles for those who will give me money not when they arrive at the gas station, but in advance. And when he arrives at the gas station, I will accept payment in tokens. But this is far from mining.
As a rule, cryptocurrencies do not have owners, there are creators, developers who monitor the general state of the system. For example, Bitcoin has a semi-invented creator, Satoshi Nakamoto. Classic Bitcoin is supported by The Bitcoin Core project team. If someone separate from The Bitcoin Core project decides to make changes to the code, then it will no longer be Bitcoin, but its offshoot (fork).

Answer 8

Mining has one of the most important functions - protecting the network from attacks.
There are two main types of PoW and PoS mining:
PoW (Proof of work) - mining with power (ASICs, video cards, processors) - the more power is involved in the network, the more difficult it is to attack the network, since 51% power is needed to discredit the network.
PoS (Proof of Stake) - mining by the number of coins - the more coins, the more they bring income (like interest in a bank). This type of mining is more environmentally friendly. To attack the network, you need to own 51% of all coins, which can be a very large amount. But by discrediting the network, the value of the coins will fall, and 51% of the attacker's coins will depreciate, which makes such an attack pointless.
Another function of mining is network maintenance - finding new blocks into which all past transactions are entered, a kind of open ledger.
Is not a fact. The algorithm changes the difficulty of mining new blocks depending on the number of miners (total network power). If the miners leave, then the difficulty drops. Bitcoin is profitable to mine, so new miners are connected to its production, and the complexity is constantly growing. But as soon as its price becomes less than the cost of production, then some of the miners will leave, and the difficulty will gradually begin to fall. With hundreds of small coins, this happens all the time.
Each cryptocurrency has open source codes, there is an author of the code, but no one is the owner. But there are those who are engaged in support. If the support team is active, then the value of the coin grows, if no one develops the coin, then its value on the exchange falls.
There is such a thing - premine - when the author of a new coin in the algorithm indicates the number of coins that were mined in the first block and belong to the developers. Usually these are small percentages or fractions of a percent. These funds are used to support the development team, as well as to pay exchanges to open trading for this coin.
Of course, anyone can, as you said, release candy wrappers, and keep everything 100% for themselves. But these coins still need to be able to sell, and this is called ICO - Initial Coin offering. To do this, you need to create some kind of product, service (or at least an imitation of vigorous activity in the event of fraud, and this happens), which will be closely tied to this coin. Then investors will buy these coins, in the hope of further growth.
If you just create a coin and do not make efforts to promote it, then such a coin will have zero value, it will not interest anyone.
It happens that some coins with a large premine (up to 100%) are distributed free of charge to everyone - the so-called airdrop . This is also one way to distribute coins and increase its value on the exchange.

Answer 9

From Wikipedia it says Mining (English) - mining. True, in the blockchain and cryptocurrencies system they say that we are talking about the extraction of digital currency. Take a typical mining farm as an example, where a high-performance computer with several video cards is running at the core. Additionally, take into account the resource forknews.io/regulation/001430-banki-vs-kriptovalyu... about cryptocurrencies, just the question is disclosed about the reliability of cryptocurrencies.

Answer 10

The meaning has always been the same everywhere, to earn money or cut it down, in any convenient way.

Answer 11

But what if the meaning of mining is in distributed calculations of the consequences of the upcoming global cataclysm?
The planet would not spend such a huge amount of resources on a meaningless "calculation of blocks".

Answer 12

So no one could answer what the essence of mining is! Don't google it, it's not there! Smoke the topic on ch. There, the candy wrappers have already died, the economy is being changed radically!