2 min read

Miners, validators, and block producers - oh my!

Blockchains are just a bunch of computers running the same software. Anyone can turn on a computer and run the software, but why would you? The simple answer: to make money.

The longer answer is that not everyone will make money, and depending on which blockchain's software you're running, the requirements to earn anything are probably different.

With bitcoin, the computers running the software (and the people running those computers) are called miners. The software works very hard to solve math problems, and the first computer in the whole network to submit a solution wins rewards. This means that your odds of making money as a miner depend on how much computer power you have. Large miners with fleets of computers make up the majority of the bitcoin network because they're able to mine profitably.

Ethereum is moving to a new approach where you get paid for running your computer as a validator (not miner). Basically you put up your ETH as collateral (staking) and approve transactions. If you just run the software and don't try to pull any scams, you'll earn more ETH for doing this.

Algorand has an interesting model. You get more tokens just for owning tokens. There's no incentive to run the software on your computer. The network just depends on the goodwill of the people who own the tokens and don't want to see the network disappear.

Running the Koinos software is a little bit different because of its microservice architecture. You can opt-in/out of a lot of the different microservices--including block producing (the Koinos equivalent to mining). If you decide to run the block production software on your computer, you'll need to burn some of your KOIN for a chance to make a profit. If you burn more, you have a greater chance of making money, similar to bitcoin's model but without needing a warehouse full of computers.

All of these different models are called consensus algorithms. Regardless of what the various blockchains choose to call the computers and people participating in consensus, the motive is profit. If you want to earn more tokens from your preferred blockchain, you can set up a computer to run the software.


P.S. If you don't want to worry about keeping a computer on 24/7, your best bet is to join a pool of other people. You'll split the rewards based on how much you put in, and whoever runs the computer will take a cut for their trouble.