In the traditional financial system, banks maintain a ledger system. This ledger holds the transaction records for the accounts within the bank. With it, the bank knows how much money any account contains and what transactions it has been a part of.

Crypto miners (or stakers) oversee the ledger for any given coin. When new transactions need to be added to the blockchain, miners compete to win the transaction fees. New blocks are created to hold transaction information which goes in the block’s body. The header of that new block contains a hash, aka the block’s ID.

Miners & GPUs are working to guess the hash of the new block.

Guess the hash and win transaction fees.

Working as part of a mining pool, every time the pool finds a correct hash and wins the fees, the pool gets paid. Depending on the pay structure of the pool, it pays out rewards to its members.

Within the blockchain financial system, miners oversee the ledger and get paid for maintaining that record. Millions of miners around the world validate the financial transactions of the coin, committing them to the ledger aka blockchain.

New block headers also contain the hash of the block before it, making the blockchain like a necklace. Each link on the chain connects to the records before and after by their hash values. When run through an algorithm the hash translates to the transaction data within the block.

Therefore, records can never be altered or falsified. Any differences in the chain prove a miner or staker is untrustworthy, leading the counterfeiter to lose their coins.

Rather than the banks earning the fees associated with financial transactions, individuals or corporations mining around the world earn instead.

A miner’s hash rate determines how many hashes they can guess per second. The more guesses, the more chances at completing the block and winning the fees.