Recently I've dived head first into this whole "bitcoin thing," and now I have been tasked with writing a one page intro for a big tech site to their bitcoin mining testing article. I have been doing a lot of reading and listening to others talk about bitcoin and how it all works/what mining actually is/does, and needless to say I want to make sure that my intro is correct
Please correct any misconceptions on my part, and thanks in advance
The area where I'm not quite confident in my assessment of what is going on is in mining. From my understanding, mining is the method through which bitcoins' release into circulation is regulated. Every 2016 blocks, the difficulty is adjusted based on the network's total hashing power and can go up or down. Currently the reward for successfully finding a block is 50 BTC, and will decrease over time to 0 BTC; however, the reward will be in that of transaction fees.
All of the transactions throughout the bitcoin network are publicly recorded in a huge block chain, and mining uses proof-of-work problems to verify transactions in the block chains in addition to creating an every increasing legit block chain to thwart dishonest users because the longest block chain is the one that the network will give priority/treat as the "most legit" record of transactions when presented with differing records/chains.
So.. is mining trying to find the hashed transactions within a block to add them to the block chain... or is it creating new blocks out of nowhere/independently of any Bitcoin network transactions? I understand how mining is releasing coins into circulation; however, what will it actually be doing once all coins are release, e g what will the program actually be doing/working on?
Thank you for your help in clearing up my confusion
I apologize if this doesn't make sense and/or for typos.. I'm really tired!
EDIT: actually, I just found this (http://forum.bitcoin.org/index.php?topic=7269.0
) and it may confirm some of what I was thinking. I read this yest. but must've missed the line about mining and the 50 BTC being a /reward/ for verifying the block chain (I was unsure if these 50 BTC were being found you see). Anyway, discuss on, tia