Understanding Crypto Mining
Crypto mining was launched in 2009 after the invention of Bitcoin by Satoshi Nakamoto. It is a process that involves verifying transactions of different types of cryptocurrencies before they’re added to the blockchain (digital ledger).
It happens digitally through mining software where miners solve complex mathematical issues. After winning a competition, a miner gets rewards for their work with crypto.
Most people who engage in crypto mining are looking for a secondary source of income, while others want financial freedom without government interference.
How Crypto Currency Mining Works?
This competitive process is where miners compete to solve complex mathematical problems through high-performance computers. In every problem, there are cryptographic hash functions connected to a block with cryptocurrency transaction data.
The first person in the competition to crack every code gets a reward to authorize the transaction. Through this, the miner gets to earn some cryptocurrency.
In addition, if any of the miners manage to solve the mathematical problem and verify the transaction data, they’ll be able to add the information to the public blockchain ledger.
However, the transactions in crypto mining are decentralized, unlike that of the banking system. This means that transactions are stored in a public ledger on several computers in different places and by various participants.
Remember, computers in this network are known as nodes, and they verify and monitor transactions concurrently. Verification and monitoring are a way of preventing fraudulent transactions.
Who Can Participate in Crypto Mining?
Anyone can be a crypto miner. However, what stops many from participating in this competition is the high prices of hardware that are used. Additionally, the highly competitive level and the complex mathematical problems which require more energy to solve can bar potentials who don’t understand how the mining goes.
This has seen some miners opt for the black market to participate in crypto mining. Some are also using cloud mining which enables them to hire/ rent mining machines. If you’re a renter, you will be allowed to have any cryptocurrency your devices earn.
How Crypto Mining Takes Place
The first thing you’ll require if you’re interested in crypto mining is the right computer hardware. You can use Graphical Processing Units (GPUs) or Specific Integrated Circuit (ASICs) to mine various blocks for cryptocurrencies. Cryptohosting.ca offers GPU mining and Asic mining plans to get you started.
Once your miner is setup you need to create your wallet like an account where you’ll get your cryptocurrencies after mining.
It’s important to note that cybercriminals have their way of mining through other miners’ networks using malware in ‘crypto-jacking.’