How Ethereum mining works

Here’s a simplified explanation of how Ethereum (ETH) Mining works:

1. Mining Process

1. Block Propagation:

   • Miners on the Ethereum network collect pending transactions from the network's transaction pool (mempool).
   • They package these transactions into a block along with other block headers and metadata.

2. Proof of Work (PoW):

   • Ethereum currently uses a Proof of Work consensus mechanism where miners compete to solve a cryptographic puzzle.
   • Miners expend computational power (hashing power) to find a nonce (a number that, when combined with the block data, produces a hash value meeting specific criteria).

2. Validation Criteria

1. Block Validity:

   • Once a miner finds a valid nonce, they propagate the completed block to other nodes on the network.
   • Nodes validate the block against Ethereum's consensus rules, including:
     • Validating transactions against the current state of the blockchain (e.g., sender has enough funds, transactions are properly signed).
     • Checking that the block adheres to Ethereum's gas limit and block size constraints.
     • Verifying the Proof of Work solution provided by the miner.

2. Consensus Verification:

   • Nodes on the network independently verify the validity of the block.
   • If consensus is reached (a majority of nodes agree that the block is valid and adheres to network rules), the block is considered ready for inclusion in the blockchain.

3. Block Finalization

1. Inclusion in the Chain:

   • Once verified, the block is added to the Ethereum blockchain.
   • It becomes part of the immutable ledger, with subsequent blocks linking to its hash value in a chain-like structure.

2. Confirmation:

   • As more blocks are added to the blockchain (typically, subsequent blocks build upon the previous block's hash), transactions in the block become more secure and difficult to reverse.
   • Transactions included in the block are considered confirmed once a certain number of subsequent blocks (confirmations) are added on top, indicating network consensus and security.