Proof of Working Mining for Cryptocurrencies

Cryptocurrency miners are in a race to solve a mathematical puzzle, and the first one to solve it (and get it approved by the nodes) gets the reward. This method of mining is called the Proof-of-Work method. But what exactly is this mathematical puzzle? And what does the Proof-of-Work method involve? To explain this, we need to understand which stages are involved in the mining process: 1. Verify if transactions are valid. Transactions contain the following information: source, amount, destination, and signature. 2. Bundle the valid transactions in a block. 3. Get the hash that was assigned to the previous block. 3. Solve the Proof-of-Work problem (see below for details). The Proof-of-Work problem is as follows: the miners look for a SHA 256 hash that has to match a certain format (target value). The hash will be based on: 1.The block number they are currently mining. 2. The content of the block, which in Bitcoin is the set of valid transactions that were not in any of the former blocks. 3. The hash of the previous block. 4. The nonce, which is the variable part of the puzzle. The miners try different nonces to find one that results in a hash under the target value. Hope this helps. Lawrence, Cryptocurrency Academy (https://cryptocurrencyacademy.blogspot.com)