Today you can buy a computer that is specifically designed for creating bitcoin blocks. Similar to home computers where you shop for them based on their features and speed. The same is true for bitcoin; computers from 2018 are still running today along with all the newer models with much faster speeds.
Hashrate is the term used to describe the speed of bitcoin computers. With the continued increase in computing speed and more new computers participating, the hashrate has continued to increase.
What these computers are doing is only one thing, it’s called hashing.
These computers are taking all the transactions that are waiting. Then creates a list of as many as possible to fit into the “block”, then will hash that block. The result of that hash will determine if they get their “block” added to the blockchain.
Hashing is computer speak for taking data and converting it into a 256 character text. If you change anything about the data, your text will change completely. That text can be letters or numbers, upper and lower case letters also. If that text has a specific number of 0s at the beginning, it meets the criteria to be included in the blockchain and confirmed by all the other bitcoin computers.
Your computer will let all the other bitcoin computers know it “found a block” and provides proof. Each bitcoin computer that receives the message will verify the authenticity of the work and all the rules are followed. If all checks out, it will add the new block to its database and relay the information to other bitcoin computers until all around the world every bitcoin computer acknowledged the new block. Once added to all the computers, the transactions included in the block are considered confirmed.
Then the race begins again to hash a new block with more transactions waiting for confirmation.
In part 6 we will take a deeper look at transactions.
