Bitcoin miners compete to validate transactions and earn rewards through a process called proof of work from "summary" of The Bitcoin Standard by Saifedean Ammous
Bitcoin miners are the backbone of the network, responsible for securing the system and processing transactions. They act as auditors, verifying and recording transactions on the blockchain. To incentivize miners to perform this crucial task, Bitcoin rewards them with newly minted bitcoins for every block they successfully add to the chain. The process through which miners add blocks to the blockchain is called proof of work. Miners compete against each other to solve complex mathematical puzzles, with the first one to find the solution being able to add a new block of transactions to the blockchain. This process requires a significant amount of computational power, which ensures that miners are incentivized to act honestly and secure the network. The difficulty of the puzzles is adjusted regularly to maintain a consistent block time of around 10 minutes. This ensures that new bitcoins are issued at a predictable rate and that the network remains secure. Miners must invest in specialized hardware known as ASICs to compete effectively, as regular computers are unable to compete in the arms race for mining power. By validating transactions and adding blocks to the blockchain, miners play a critical role in the functioning of the Bitcoin network. They ensure that transactions are secure and irreversible, providing users with confidence in the system. Without miners, the network would be vulnerable to attacks and fraudulent activity, undermining the trust and utility of Bitcoin as a form of digital money.
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