The miners
Activity
The miners are responsible for the activity known as “blockchain mining”.
These workers make their computers available to the blockchain for the purpose of verifying transactions made on it, typically transactions involving cryptocurrencies, approving them and enclosing them into blocks to be added to the blockchain.
Their task is to solve a mathematical problem with brute-force methods (so-called “proof-of-work”) in order to make a block of transactions valid to be concatenated to others. This method consists of trying all possible solutions to a question until the exact one is found.
They receive, in turn for their work, a fixed amount of cryptocurrencies generated ex novo.
In other words, their job can be divided into the following phases.
- To make a new block of the blockchain, the network creates a hash for the block of transactions. Miners start generating hashes through their computers.
- The first miner to generate a hash gets to attach the block to their copy of the blockchain.
- Other miners check the block is correct.
- The miner receives his reward.
Role in a DAO
Usually, individual miners, in order to maximize their earnings, gather in “mining pools”, which are regulated at the technological level, based on protocols that coordinate the actions of hundreds or thousands of members.
Otherwise, the miners work in competition with each other: the fastest to get a valid block, thus the one with the most computational power, can hook it into the blockchain.
In turn, mining pools are controlled by so-called “mining pool operators”, who possess large amounts of computers and, consequently, a strong power of control over the organization for which miners work, including the possibility of directing its resources, at their discretion, in one or the other direction generated in the event of a fork.
In this sense, when they work for a decentralized autonomous organization, they stand at an intermediate level between core developers and token holders. And indeed, they are not directly part of management, as they cannot implement or modify the code, and yet they exercise a strong power of informal control through, precisely, the activity of validating operations. This circumstance, as is clear, risks causing a dangerous friction between the power they exercise and the interests of the organization's participants.
References
- U. Buonora, Spiegazione dei fondamenti, in Criptoattività, criptovalute e bitcoin, edited by S. Capaccioli, Giuffrè, Milano, 2021, p. 63.
- P. Hacker, Corporate Governance for Complex Cryptocurrencies ? A framework for Stability and Decision Making in Blockchain-Based Organizations, in Regulating Blockchain. Techno-Social and Legal Challenges, edited by P. Hacker, I. Lianos, G. Dimitropoulos, and S. Eich, Oxford University Press, 2019, p. 32.
- How Does Bitcoin Mining Work?, available at https://www.fool.com/investing/stock-market/market-sectors/financials/cryptocurrency-stocks/bitcoin-mining/
