I don’t get this.
Isn’t this akin to using real resources to hunt imaginary things?
No worse than the power\ink\parchment for FNR, no?
Considering most of the ‘$$$’ are simply 0’s/1’s in some electronic ledger...
They are not ‘imaginary’ but non-physical, since you cannot hold a bitcoin in your hand..................
In Bitcoin (actually cryptocurrency) mining provides a service. That service creates “blocks”. The blocks are used to house crypto-currency transactions. Think of them as containers. To prevent just anyone from creating a container, each currency has established what a container needs to look like. This is called proof of work or proof of stake.
Containers are important because container can be “locked” by using a cryptographic hash. A hash is a one way function that can not be reversed. This allows a hash to act like a validated signature. When transactions are put into a block and signed with a hash, any attempt to change the transaction log will be detected. Further since it is a distributed architecture, a hacker or forger would have to change all the blocks subsequent to the initial change as well. An act that is considered impossible. Thus, blocks are important.
Miners create blocks, but by design, it is not easy. It takes computer power to create a block and only the first person who creates the block gets paid for it. Getting paid for solving this mathematical puzzle is how miners get paid. X amount of coins per block solved/created. In essence, mining turns electricity into bitcoins or other crypto-currency. These can be exchanged for goods, services, products, commodities and money ONLY because there are people willing to make that exchange.