Cryptocurrencies like bitcoin, ether, Dogecoin are considered “The New Oil”. If one had known the impact oil would have on our world back in the 1900s, investing in it would have made millions of dollars by now. Similarly, we are on the cusp of the Crypto revolution”. Although the value of currencies like bitcoin has appreciated so much that the majority can’t invest in it, other emerging coins have the potential to appreciate 5-10 years down the line. While the straightforward method to get into the digital currency industry would be to buy them online, an approach called cryptocurrency mining is used to mine/extract bitcoin without paying for it. Let’s discuss what all the fuss is about.
Crypto mining is the process of earning cryptocurrency by solving complex cryptographic equations using computers. These equations are required to enter transaction records to a public ledger called Blockchain and Validating Data Blocks.
How does Bitcoin mining work?
Every 10 minutes a new block(a bunch of pending transactions) is entered and chained to a mathematical puzzle(cryptographic equation). The first miner to find the solution to this puzzle lets all the other miners in the network know of his solution. These miners check the source of the funds, the validity of the solution provided by the first miner. Once approved, the block is cryptographically added to the ledger. The miner who came up with the solution either becomes the owner of this newly minted bitcoin or is paid a transaction fee for his efforts. This incentivises more miners to solve or validate block solutions. If more miners are present, the difficulty of the mining process increase and the opposite is also true.
Pooling resource to mine bitcoin
Pooling resource to mine bitcoin increases the odds of finding a block, the probability of finding the block as a singular miner is low. Through mining pools, miners can combine their computational resources. The increase in computational resources enhances the odds of finding a block and getting to the cryptographic solution fasters than the rest. The resultant reward from the mining is shared between the members of the pool.
Do you need to be a math wizard to become a miner?
Nope, these solutions/cryptographic puzzles are solved by high-end mining computer and mining rigs. We will post an article listing the best resources for mining bitcoin, prices. We will also release another article detailing the process of mining – the microscopic details of mining.
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