Aug 2, 2018 at 20:14
Aug 2, 2018 at 20:14 UTC
What Is Cryptocurrency Mining
BTC Wires: In the contemporary times of 21st century, Cryptocurrency is one of the most discussed topics in the realms of digital money. Cryptocurrency is nothing but a form of virtual money which doesn’t exist physically in the real world.But still , it is one of the most potential form of money in terms of future prospects.
As it is said earlier, it is not a form of money which is real, rather it is virtual . Now the question arises: How is this Cryptocurrency generated? This question can be answered in one word: By Mining. But now the curiosity about this word Mining creates a question in the minds of folks. So the basic question comes:
One of the most basic elements of Crypto World is MINING. Literally a Mining means extraction of valuable minerals from the earth. An example of this which comes in our mind is mining of Gold. Like gold is mined after proper geographical surveying and prospecting on real grounds, cryptocurrency mining ways are also somewhat analogous. In crypto mining, virtual grounds are used instead. This form of money is extracted or mined by solving a complex mathematical puzzle (done by the miner).
Cryptocurrencies work on a technology named Blockchain. Blockchain can be defined as a ledger system keeping the records of all the transactions done in a systematic manner. Blockchain as the name suggests consists of blocks linked in a chain. Once, a person attempts to make a transaction with another person on this virtual platform, miners come into existence. For this transaction to be valid and added in the blockchain via the introduction of a new block, many miners compete. They have to solve a complex mathematical problem involving use of advanced computers and cryptographic methods depending upon the complexity of the puzzle. The first person who is successful in solving the problem is considered for the financial reward and termed as the miner as he/she is the one who mined the currency as a reward. This way the transaction is recorded in a block and the block is added in the chain after getting the solution verified by the other miners (atleast 50%). In general, a time slot of 10 minutes is allotted for this mining process in a single transaction.
The cryptocurrency mining has some basic and necessary hardware and software requirements. Regarding hardware, an advanced Graphics Card, efficient power supply and a minimum 3 slot motherboard is must. A good mining software and a coin wallet along with a high speed internet connection is what one needs in addition to the hardware.
Regarding the cryptocurrency awarded to the miners, it has an interesting pattern. In 2009, when the Bitcoins came, it was 50 BTC per block mined. For every 210,000 blocks mined, the reward would be reduced to half and would approach a zero value after 64 times as the net worth of bitcoins cannot exceed 21 million. So, it witnesses a decreasing order.
In the modern era, cryptomining is a fast pace race involving a large number of people competing against each other to add a block in the blockchain legitimizing the transaction via solving complex mathematical problems using advanced techniques. This is done by the people in order to reap the cryptocurrency which is of great monetary value in today’s times. This open approach makes this virtual platform of Cryptocurrency and blockchain faster, reliable and transparent.