1. The blockchain is a public table of all previously completed transactions in the system, which is maintained from the moment the network is launched.

2. In order to the financial transaction was completed, the coins were withdrawn from the sender's account, and then were credited to the recipient's account, the transaction must be recorded in this public register. So for this, the transaction should be checked for validity, after which all new transactions are combined into blocks, and they are broadcasting to the network.

3. Miners do this work. They are the computing capacity of the PCs connected to the network. Their task is to find the signature to the block — a special code, confirming that all transactions are correct. When the code is found, it will become the name of the block, under which it will be recorded in the blockchain. A miner, who found the code and made the note in the main table, receives the reward for this in new coins and transfer fees.

4. When the block is added to the public table, all transactions, which are included in it, will be recognized as legitimate, and this will be the actual transfer of coins. It will be not possible to change the record in the blockchain.

In the financial system we are used to, the work of banks is supported by the centralized servers. With their help, the transactions are confirmed and the information about the account balance is stored. The cryptocurrency (such as BTC) is a decentralized system where the participants of the network invest their computing power into the network to maintain balances and a list of transactions. The resources of the equipment and electricity of the users are spent on this. However, the network rewards the participants with coins for this, in proportion to their real investments and commissions from people who send transactions. This process is known as mining.

Initially, the altruists, who believed in cryptocurrencies, were mining. They believed in the idea and wanted to support the work of the network and increase the liquidity. Today, all participants mainly pursue the financial interests because of the rise in the value of cryptocurrencies. The ability to set up a computer for mining and monitor how the wallet balance is gradually increasing is attractive to many people.

But it is important to remember that the only one miner, who is the first to find the the signature of a new block, will get the reward for the work done. Each miner has an indicator which is called the hashrate. It shows how many mathematical calculations your PC is able to make per second. Tne increase of the hashrate indicator (the speed of calculations) also rises the chances that you will be the first to find the signature and receive the reward in new coins and transaction fees.

Today, the network of popular cryptocurrencies, such as Bitcoin and Ethereum, consists of millions of hosts (PCs), and every time a new miner connects to the network, the competition is increasing. It means that every day it becomes more and more difficult to get the cherished reward, and you need more and more hashrate to be the first to find the signature. Now there are already the industrial farms, the special heavy-duty computing equipment which is called ASIC, and the whole mining plants have been built. Such industrial players leave the amateurs with near-zero chances of getting cryptomonets. However, even single miners can still make money on mining by combining their available computing capacity with other participants. So such associations got the name of the mining pools.

Mining pool is a way for miners to work together, combining their capacities into one. The chances of being the first to carry out all calculations and find the signature to the block are significantly increased due to the fact that the total power is obtained much more. In this case, the received reward is divided among the participants in proportion to the contributions of their capacities to the common pool.