That still boggles my mind. I thought the whole idea was to remove middle man that not only authorize (or not transaction) but also charge hefty fees? I was told for long time it is free to buy or sell with bitcoin. What am I missing?
The Bitcoin network doesn't do away with the concept of a middle man completely, it merely replaces one mutually trusted middle man (like the Visa card network) with several untrusted middle men (anyone that can afford a mining rig).
If one untrusted middle man produces a proof of work for a transaction request, the other untrusted middle men verify the PoW to be valid, if there is consensus §, they collectively agree to append the transaction to the next block on the blockchain. The untrusted middle man is then rewarded for their efforts by being paid the mining fee that was accruable for the transaction.
[§] If 2 or more untrusted middle men solve the PoW for a transaction request independently, i.e. they are competing to be rewarded with the same mining fee, then the untrusted middle man with the longest confirmations from other nodes on the network is the one whose block will be appended to the blockchain, the others will be discarded.
Would appreciate any corrections to my gross simplification.
