Mining cryptocurrency is one of the biggest trends and hottest topics in tech, fintech just now. Mining continues to be a critical part of the crypto ecosystem as blockchain infrastructure needs support and digital currency is still in its infancy. Throughout this blog, you will learn all about cryptocurrency mining — what it is, how does it even work and the exact tools needed for entry.
What is Cryptocurrency Mining?
Cryptocurrency mining (a.k.a. cryptomining) is the process in which transaction records are added to a public ledger, known as Ethereum blockchain through solving complex mathematical puzzles with hash functions that correspond to Googles PageRank consensus algorithm for finding valid blocks on Etherscan.Io network. A main differentiator between cryptocurrency and fiat currency is that traditional money is issued by central banks, while cryptocurrencies rely on decentralized networks. Mining is THE crux of keeping this crazy decentralized system running and making certain people can trust that transactions are safe.
How Does Cryptocurrency Mining Work?
And of course, that a pending transaction is waiting to be included in the blockchain when mining starts. These transactions are collected by miners and constructed into a block. These miners aim to solve the cryptographic puzzle of this block. The first miner who solves the puzzle can add that block into blockchain and will be rewarded for this task.
Mining in a nutshell
Transaction Selection: Miners choose what transactions are in by choosing which to put into the new block.
Hash Calculation: Their hash is a value that they are looking for through the network difficulty. This is achieved by modifying the input data again and hashing it until a value calculated with hash falls within desired bounds.
Block Addition: Once a miner has solved the block and has been able to come up with a hash, which is within the set standards, the block is broadcasted onto the network. Transmitted to other nodes they reply to the Block and upon confirmation the Block becomes a new Block in the chain.
Reward: As payment for the work done and solution offered the system rewards the miner with a particular amount of cryptocurrency. For example, anybody engaged in the processing of bitcoins will receive bitcoins from other individuals in exchange for hard basin mining each of the bitcoins.
What Is Mineable Cryptocurrencies?
As for the currently popular and international type of cryptocurrency, it is the Bitcoin; however, many others can be mined. Some popular mineable cryptocurrencies include:Some of the famous cryptocurrency that are mineable are:
Bitcoin (BTC): The first and perhaps the most famous Digital Currency that is currently in circulation is bitcoin that can only be mined with the help of ASICs since it has a high level of difficulty.
Ethereum Classic (ETC): Ethereum Classic can still be mined using the GPU hence many miners would prefer to work with it not involving the usage of ASIC devices.
Litecoin (LTC): Its’
can be confirmed and for mining Litecoins one requires GPUs or ASICs that uses low power and is looked at as ‘silver’ to Bitcoin’s ‘gold.
Monero (XMR): Due to the fact that the use of Monero cryptocurrency involves privacy, mining the currency employs algorithms that are more welcome to being handled by CPUs than the others are.
Zcash (ZEC): Another up and coming privacy coin to mine is the Zcash, it can be mined with the help of such a device as ASIC miners.
WazirX).
Mining Hardware and Software
ASIC miners are usually the go-to in competitive markets such as Bitcoin. However, for altcoins such as Ethereum Classic or Monero, graphics processing units (GPUs) from Nvidia or AMD, which are performant, are usually the ones in use.
The mining software changes depending on the cryptocurrency and hardware you use. Some of the mining software includes CGMiner, EasyMiner, PhoenixMiner, and T-Rex Miner(WazirX)