When you’re often browsing the internet, you’ve probably came across some articles, videos, or posts about crypto mining. You’ve probably also asked yourself what is its relation to Bitcoin, Dash, Ethereum, and other types of cryptocurrencies. It is important to know how crypto mining works, so you know if it’s still eligible to do today.
A month of bitcoin mining on a home computer in 2016 would have yielded around 0.1 BTC, or $3,770 at today’s pricing. However, mining bitcoin for profit with a home setup is currently difficult. Due to growing difficulty levels, a home miner would be lucky to accumulate 0.1 bitcoin after several years and numerous burnt-out graphics cards.
What is Crypto Mining?
The term “crypto mining” refers to the process of obtaining cryptocurrency through the use of computers to solve cryptographic equations. Validating data blocks and adding transaction information to a public record (ledger) known as a blockchain.
In the pursuit of transaction fees and additional digital money, cryptocurrency mining is the distributed process of authenticating digital currency transactions and adding them to a public ledger/record for the currency (the blockchain). Crypto mining is a computationally expensive operation that can consume a large amount of computing time and electricity.
It is important to understand that the cryptocurrency market itself is an alternative to the traditional banking system that we use globally. To properly comprehend how crypto mining works, you must first comprehend the distinction between centralized and decentralized systems.
Understanding centralized and decentralized systems
In traditional banking, a centralized record is controlled, maintained, and updated by a single authority. This means that each and every transaction must pass via the central banking system. Whereas in cryptocurrency, there is no central authority, nor a centralized ledger. This is because cryptocurrency operate in decentralized system with a distributed ledger.
Crypto mining is a time-consuming and expensive way of creating cryptocurrency. Knowing a little more about it before diving deep into it would be a good place to start.
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