The word "mining" is somewhat misleading. By evoking the extraction of precious metals, it focuses our attention on the reward for mining, the new bitcoin created in each block. Although mining is incentivized by this reward, the primary purpose of mining is not the reward or the generation of new coins. If you view mining only as the process by which coins are created, you are mistaking the means (incentives) as the goal of the process. Mining is the mechanism that underpins the decentralized clearinghouse, by which transactions are validated and cleared. Mining is the invention that makes bitcoin special, a decentralized security mechanism that is the basis for peer-to-peer digital cash.
((("bitcoin", "mining and consensus", id="BCmining10")))The word "mining" is somewhat misleading. By evoking the extraction of precious metals, it focuses our attention on the reward for mining, the new bitcoin created in each block. Although mining is incentivized by this reward, the primary purpose of mining is not the reward or the generation of new coins. If you view mining only as the process by which coins are created, you are mistaking the means (incentives) as the goal of the process. Mining is the mechanism that underpins the decentralized clearinghouse, by which transactions are validated and cleared. Mining is the invention that makes bitcoin special, a decentralized security mechanism that is the basis for peer-to-peer digital cash.
Mining _secures the bitcoin system_ and enables the emergence of network-wide _consensus without a central authority_. The reward of newly minted coins and transaction fees is an incentive scheme that aligns the actions of miners with the security of the network, while simultaneously implementing the monetary supply.
@ -1082,4 +1082,4 @@ Consensus software development continues to evolve and there is much discussion
It is important to recognize that there is no perfect solution for consensus development. Both hard forks and soft forks involve trade-offs. For some types of changes, soft forks may be a better choice, for others hard forks may be a better choice. There is no perfect choice; both carry risks. The one constant characteristic of consensus software development is that change is difficult and consensus forces compromise.
Some see this as a weakness of consensus systems. In time, you may come to see it as I do, as the system's greatest strength.
Some see this as a weakness of consensus systems. In time, you may come to see it as I do, as the system's greatest strength.((("", startref="BCmining10")))
judymcconville@roadrunner.com
7 years ago