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Have you ever wondered how the Ethereum extraction works? The process is not very different from the extraction of Bitcoin (read: "How Bitcoin Mining works"). Contrary to popular belief, blockchain miners are not just people who extract cryptocurrency token from the ether. Instead, miners fill the function of the intermediary that is absent in decentralized systems.
To understand the role of Ethereum miners, you have to imagine how a traditional financial institution is in trouble. The banks and PayPal are made up of checks and balances that ensure that no errors are committed and that no fraud is committed. These organizations run everything from a central hub and all transactions must go through this hub.
How Ethereum verifies the changes
Blockchain ecosystems work differently. There is no intermediary or intermediary to verify if a transaction is legitimate. Instead, the network relies on miners to verify changes to the network. Every time a transaction or change is made, multiple computers must verify that change.
Suppose ten computers need to verify a change you make. If nine of the ten computers verify the change, but the tenth no, it is easy to see which machine is making a mistake. This method of keeping records is far superior to the centralized models of banks. If the bank makes a mistake, there is no one to correct it.
How the miners of Ethereum make money
Your bank will traditionally charge you for their services. The fees are charged for their internal verification system. When you use Ethereum, you pay the miners for their verification services. Every change you make is recorded and organized in blocks on the blockchain. Whenever a block is completed, the miners earn 5 ETCs.
How does the mining of Ethereum work, then? All the changes you make when you're using a little space take up space in the form of data, just like storing your photos on iCloud. Each data set can be compressed by creating a hash. A hash is a string of code that contains all the data, a bit like a zip file on your computer.
Ethereum miners compete to find the right hash for a particular blockchain data block. More miners can work simultaneously on the same block. When a miner breaks the code and finds the hash, the other miners stop working on it. Only the miner who finds the correct hash receives the 5 ETC for the job.
From the test of work to the game test
The future of the mining of Ethereum is uncertain. Although the current system seems to work well enough, the Etherum team is working on a replacement. The current mining system is called proof-of-work. The name makes sense because only miners who can prove they have a hash with a block of data have been rewarded with Ether for their work.
However, the game test could be the future. This new method will see the fired miners in favor of Ether owners. Therefore, the game test means that the owners of Ether cities (which have a stake in the network) are those who reach a consensus.
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