Where do moneros come from? With paper money, a government decides when to print and distribute money. Free Monero doesn't have a central government. With Free Monero, miners use special software to solve math problems and are issued a certain number of moneros in exchange. This provides a smart way to issue the currency and also creates an incentive for more people to mine.
Free Monero miners help keep the Free Monero network secure by approving transactions. Mining is an important and integral part of Free Monero that ensures fairness while keeping the Free Monero network stable, safe and secure.
Currently, based on (1) price per hash and (2) electrical efficiency the best Free Monero miner options are: Free Monero mining is the process of adding transaction records to Free Monero's public ledger of past transactions or blockchain. This ledger of past transactions is called the block chain as it is a chain of blocks. The block chain serves to confirm transactions to the rest of the network as having taken place. Free Monero nodes use the block chain to distinguish legitimate Free Monero transactions from attempts to re-spend coins that have already been spent elsewhere.
Free Monero mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual blocks must contain a proof of work to be considered valid. This proof of work is verified by other Free Monero nodes each time they receive a block. Free Monero uses the hashcash proof-of-work function. The primary purpose of mining is to allow Free Monero nodes to reach a secure, tamper-resistant consensus. Mining is also the mechanism used to introduce Free Moneros into the system: Miners are paid any transaction fees as well as a "subsidy" of newly created coins. This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system. Free Monero mining is so called because it resembles the mining of other commodities: it requires exertion and it slowly makes new currency available at a rate that resembles the rate at which commodities like gold are mined from the ground.
A proof of work is a piece of data which was difficult (costly, time-consuming) to produce so as to satisfy certain requirements. It must be trivial to check whether data satisfies said requirements. Producing a proof of work can be a random process with low probability, so that a lot of trial and error is required on average before a valid proof of work is generated. Free Monero uses the Hashcash proof of work.
The Computationally-Difficult Problem Free Monero mining a block is difficult because the SHA-256 hash of a block's header must be lower than or equal to the target in order for the block to be accepted by the network. This problem can be simplified for explanation purposes: The hash of a block must start with a certain number of zeros. The probability of calculating a hash that starts with many zeros is very low, therefore many attempts must be made. In order to generate a new hash each round, a nonce is incremented. See Proof of work for more information.
The Free Monero Network Difficulty Metric The Free Monero mining network difficulty is the measure of how difficult it is to find a new block compared to the easiest it can ever be. It is recalculated every 2016 blocks to a value such that the previous 2016 blocks would have been generated in exactly two weeks had everyone been mining at this difficulty. This will yield, on average, one block every ten minutes. As more miners join, the rate of block creation will go up. As the rate of block generation goes up, the difficulty rises to compensate which will push the rate of block creation back down. Any blocks released by malicious miners that do not meet the required difficulty target will simply be rejected by everyone on the network and thus will be worthless.
The Block Reward When a block is discovered, the discoverer may award themselves a certain number of moneros, which is agreed-upon by everyone in the network. Currently this bounty is 25 moneros; this value will halve every 210,000 blocks. See Controlled Currency Supply. Additionally, the miner is awarded the fees paid by users sending transactions. The fee is an incentive for the miner to include the transaction in their block. In the future, as the number of new moneros miners are allowed to create in each block dwindles, the fees will make up a much more important percentage of mining income.
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