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I have read many articles and watched videos but I still can't fully understand Bitcoin, mining and blockchains. I understand a block in a blockchain contains data and its resulting hash. I also understand a miner attempts to generate a new hash by hashing the previous hash in the chain with a nonce. A miner will keep trying until they create a hash with required difficulty level.

  1. I think I understand what happens during mining by I don't understand why we mine? i.e. Yeah I found a block so what? (of course miners are rewarded but why?)
  2. How would people use this found block in a real life scenario?
  3. Is the data in a block a real life scenario data.

A real life example will be appreciated.

If people are going to down vote please let me know why so I understand?

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I think I understand what happens during mining by I don't understand why we mine? i.e. Yeah I found a block so what? (of course miners are rewarded but why?)

Miners are rewarded for mining via the block subsidy and the transaction fees (transaction fees are paid to miners). They mine in order to earn that reward; the reward has value and therefore miners will want to get it by mining.

How would people use this found block in a real life scenario?

Blocks are not just arbitrary data, they are part of the Bitcoin blockchain and used to store transactions that are considered permanent. They don't have any other use. The point of blocks is to have a permanent transaction history that is guaranteed by the work that miners must do to create the block.

There is no other "real life scenario" or "real life example" to give here for blocks; that's just not how they work.

  • If it needs to be real life data then what data is being stored in bitcoin hashing because there is no "real" usage of bitcoin currently? – webDeveloper Apr 12 '18 at 12:01
  • Once the last block of bitcoin is mined, will it mean there are no more blocks left to store more transactions hence bitcoin blockchain will only contain transactions that are stored until the last block is mined? – webDeveloper Apr 12 '18 at 12:03
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    What do you mean there is no "real" usage of Bitcoin currently? There are Bitcoin transactions, people are sending Bitcoin to each other. There will always be Bitcoin transactions; that is "real" usage of Bitcoin. That is the data that is stored in blocks. There is also no "last block of Bitcoin"; once the last Bitcoin has been mined, blocks will still be mined because there will still be Bitcoin transactions that need to be processed, thus there will still be blocks. – Andrew Chow Apr 12 '18 at 14:58
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Please find the answers below:

1). Miners are nothing but transaction processors, which share the resources/processing power in a blockchain network to verify all the blocks and try to confirm the transaction and make an entry in the public ledger (Place where all the confirmed transaction goes, which will be periodically gets distributed across all the nodes in the blockchain network). Whoever in the blockchain network wins this race will be given some incentive. This incentive will vary based on how important and critical the transaction is. I would say it is a transaction fee instead of incentive because we are paying for electricity, internet, hardware etc to be part of the network and help blockchain transaction processing.

2 & 3) Yes, it should be real life scenario data otherwise there is no point of that data to be in blockchain but the technology doesn't care what data you are trying to store Examples: Signing a contract, purchasing a property, buying groceries from a merchant, Investing in a particular company etc. Once this data is made to blockchain with the help of miners then it will be there forever, unchangeable and unstealable.

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I think I understand what happens during mining by I don't understand why we mine? i.e. Yeah I found a block so what? (of course miners are rewarded but why?)

Miners are like transaction proccessors, the more miners, the more secure the network

How would people use this found block in a real life scenario?

Blocks store transactions.

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It's quite profitable. I'm also new in mining but try to follow the latest news. I also read where to sell bitcoin in canada in one article by ICO Pulse. Canada is one of the most crypto-friendly countries in the world and it's probably the simplest way to get fiat money for crypto. Want to try cryptoexchange exchanges too.

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