How Does Ethereum Mining Work?
Ethereum mining is the process by which transactions are verified and added to the Ethereum blockchain. It involves a consensus mechanism known as Proof of Work (PoW). Miners use powerful computers to solve complex mathematical problems, which helps secure the network and process transactions.
When a miner successfully solves a problem, they create a new block and add it to the chain. In return for their effort, they are rewarded with Ether (ETH), the native cryptocurrency of the Ethereum network. The mining difficulty adjusts over time to ensure blocks are added approximately every 12-15 seconds, maintaining a consistent rate of block creation.
Each transaction in the network contains a gas fee, a small amount paid by the users to incentivize miners to process their transactions. Miners prioritize transactions based on these fees, often leading to higher fees during peak network times.
It's also important to note that Ethereum is transitioning from Proof of Work to Proof of Stake (PoS) with Ethereum 2.0. This change aims to reduce energy consumption and improve transaction efficiency, marking a significant shift in how the network operates. While mining remains crucial for Ethereum currently, its future will be shaped by this transition.