Did you know that there is more than one way to own cryptocurrencies? Apart from buying cryptocurrencies, you can also hold crypto through a process called ‘mining.’ It is easy, convenient, and can be done from your computer.
What is Cryptocurrency Mining?
Cryptocurrency mining is the process of earning crypto for free through solving complex mathematical problems. Don’t be alarmed. This process isn’t as technical as it sounds. Actually, mining can be pretty difficult to explain, even though it’s not that complicated. To truly understand the process of mining, we need to trace the root to Blockchain technology.
Understanding Blockchain Technology
Blockchain Technology is a type of digital ledger that records and facilitates transactions of cryptocurrencies on its network. It stores and records digital data. It also encrypts the information into blocks. The encrypted data is then interconnected on a single, chronological digital chain. Blockchain data is usually public, and it is impossible to hack or alter.
Since digital platforms are susceptible to hacks, blockchain technology provides a secure network for payment transactions of cryptocurrencies. Most Cryptocurrencies like Bitcoin, Monero, Litecoin, etc., are built on Blockchain technology. The process of crypto mining is how data and transactions within the blockchain are secured and verified.
Blockchain doesn’t rely on any central authority, which makes mining an essential part of validating transactions on the blockchain. Miners secure the network by participating in the process of validating transactions on the blockchain. As a result, they are awarded with newly minted cryptocurrencies.
Verified miners are used to record transactions on Bitcoin’s ledger to prevent double-spending. According to Statista’s data, China has the highest Bitcoin Mining power, followed by the United States and Russia.
How to Mine Cryptocurrencies
To mine Cryptocurrencies from the blockchain, a special type of hardware is used. There are both Hardware and Software mining facilities. It will be best to choose a convenient and affordable option, as crypto mining is an unusually long process. The specialized computer hardware can be either a graphics processing unit (GPU) or an application-specific integrated circuit (ASIC).
GPU
This mining method maximizes Computational power by bringing together a set of GPUs under a rig dedicated to mining. This will require a motherboard and a cooling system. Also, GPUs linked in the rig must be connected to the internet at all times. For those interested in using this hardware to mine crypto, joining a crypto mining pool would be best.
ASIC
ASIC chips are designed for a specific purpose. Using this hardware for Crypto mining would mean that you can only mine one particular cryptocurrency. ASICs produce more cryptocurrencies than GPU. It also runs faster and has a higher hash power. However, it is more costly. Another thing to note is that you can only mine Cryptocurrencies with the same algorithm. For instance, if your ASIC hardware is designed to mine Bitcoins, you can likely mine other cryptocurrencies with a similar algorithm to bitcoin.
Cloud Mining
Cloud Mining has grown very popular amongst newbie miners. It is less expensive than GPU and ASIC, and it is also less complicated. With cloud mining, miners can remotely access the power of large mining facilities right from the comfort of their homes. All you need to do is connect your computer to the large Mining rig using a website or software. No special hardware is required to do this. Also, you may need to pay little to no fees for this. You can access free or paid Mining rigs online to earn cryptocurrencies. It is as hands-free and straightforward as possible.
In conclusion
Cryptocurrency Mining in itself sounds very complex. But it is essentially using hardware or software to lend your computers’ processing power to the invisible blockchain network, which uses your computer along with other multiple computers’ processing power to strengthen its ability to facilitate and record crypto transactions. Miners earn cryptocurrencies for this service. Earn free cryptocurrencies through cloud mining on Eo.Finance Today! You can click here to get started.
