What math problems are they trying to solve when mining for crypto?

Question

What kind of math problems are they solving? Is it used for anything? Why are they doing it?

In: 919

Answer 1

Crypto can be used for a lot of stuff beyond just Bitcoin as currency. A big part of what excites people about the future of crypto is all of the different things that it’ll maybe eventually be capable of.

What makes crypto special is the way the data is stored. When you ‘own’ crypto currency, you don’t own it because you physically have it in your pocket, or in a safe in your house. The crypto currency exists in the digital network, and it is yours because all the computers on that network agree that it is yours.

They agree it is yours because they all have a big list of every transaction ever made on the network. They can see that on this certain date at this certain time, a transfer was made to your crypto wallet.

This ledger of transactions is not stored in one central place. It’s stored on every computer on the network. It’s also not written in plain text, and is instead encrypted with a cypher or code. You might know cyphers from things like the Da Vinci code, or spy movies like James Bond. Maybe a message is written but the letters are all shifted one letter down the alphabet (so ‘hello’ becomes ‘ifmmp’). These are simple cyphers.

The kinda of cyphers being broken in crypto are MUCH more complex, to the point that a human might take many thousands of years to do it by hand.

This is ‘the math’ being done in crypto. Essentially, it’s code breaking to check over lists of transactions to confirm that the data is the same throughout the network.

This is why crypto transactions are never instant. It takes a while for any transaction to be confirmed by miners.

This means that crypto transactions are super secure, and forgery is next to impossible. The hope is that, eventually, this kinda airtight data sharing will be fast enough to send other kinds of data that might power video games, retail experiences, personal information management.

This is a huuugely simplified layperson’s explanation, based on my own limited understanding.