Why do people mine crypto currencies?

Question

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?

Answer 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?)

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.

Answer 2

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.

Answer 3

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.

Answer 4

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.