Cryptocurrency Mining

And here I am with another blog!!! since this blog is about cryptocurrency mining, you should know what is cryptocurrency in the first place!!! So if you've not read our previous blog on cryptocurrency then follow this link: I live online I am cryptocurrency

What is cryptocurrency mining?

Cryptocurrency mining includes two functions, namely: adding transactions to the blockchain (securing and verifying) and also releasing new currency.

Mining needs a computer and a special program, which helps miners compete with their peers in solving complicated mathematical problems. This would need huge computer resources.

Blockchains and the block reward

The core of mining is the idea of block rewards. For most coins, these are given to the person/group that finds a valid solution to the cryptographic hashing algorithm. This solution is a mathematical calculation that uses the results of previous block solutions, so there's no way to pre-calculate answers for a future block without knowing the solution to the previous block. This history of block solutions and transactions constitutes the blockchain, a sort of public ledger.

What is a block, though?

A single block contains cryptographic signatures for the block and the transactions within the block. The transactions are collected from the network, typically with a small fee attached, which also becomes part of the block reward. There's a difficulty value attached to the solution for a block as well, which can scale up/down over time, the goal is to keep the rate of generation of new blocks relatively constant.

For Bitcoin, the target is to generate a block solution every 10 minutes on average. For Ethereum, block solutions should come every 16 seconds. Simplistically, the number solution has to be less than some value, and with 256-bit numbers that gives a huge range of possibilities. The solution includes the wallet address for the solving system, which then receives all the transaction fees along with the block reward, and the block gets written to the blockchain of all participating systems.

Think of it as panning for gold in a stream—you might get lucky and find a huge gold nugget, you might end up with lots of flakes of dust, or you might find nothing. If the stream is in a good location, you make money more quickly. The difference is that with cryptocurrencies, the 'good location' aspect is replaced by 'good hardware.'

The reward for mining a block is now 12.5 bitcoins.

Doing the actual mining

You've got your hardware, you've joined a mining pool, and you're ready to rock the cryptocurrency world. All that's needed now is to download the appropriate software, give it the correct settings for your hardware and the pool, and then you're good to go.

What is a mining pool?

A mining pool is the pooling of resources by miners, who share their processing power over a network, to split the reward equally, according to the amount of work they contributed to the probability of finding a block. A "share" is awarded to members of the mining pool who present valid partial proof of work.

Bottom line—what's it cost and what can you gain?

The thing you need to know with cryptocurrency mining is that beyond the initial cost of the hardware, power and hardware longevity are ongoing concerns. The lower your power costs, the easier it is to make mining a profitable endeavor. Conversely, if you live in an area with relatively expensive power costs, mining can seem like a terrible idea.