What is mining in simply words
Mining is one of the types of obtaining cryptocurrency, and for the main cryptocurrency i.e. Bitcoin is the only way to get it. The person engaged in mining, called miner. Cryptocurrency mining takes place with the help of special equipment or conventional video cards for computers that are collected in special mining farms. But we’ll talk about it later. The essence of mining is to create a network of decentralized computers, which are called nodes in the blockchain, which, with the help of its computing power, will solve certain problems. The more these computers will be in the network, the more decentralized the network will be, and its work will be much faster.
The first cryptocurrency, which began to actively mine, was Bitcoin. Bitcoin mining takes place in the following way: a lot of computers in different parts of the world are trying to solve the problem and find a combination that will be the key to new transactions. After finding it, a successful miner receives a block of coins, and transactions go to their destinations. Thus, mining is necessary both to create new coins and to ensure the functioning of the current data chain.
What is the process of mining
The fact that mining is mining is known to almost everyone who has a little in the subject of cryptocurrencies, but how the process of mining cryptocurrencies, this is a question to answer which, you need to have a little more information. As we said above, computers connected to the network solve mathematical problems set by the algorithm. You probably will be interested to know what the plan of the problem, solve the computer, so here is an example. Imagine before a leaf in a cell, on which each cell will be written the same number. So, the computer sets the task of this plan: why in each cell is this figure? Why it’s worth it in every cell? And other issues of this nature.
By solving such problems, there is a process of recording and confirming the transaction in the blockchain, which is the essence of mining. For example, to confirm a transaction in the bitcoin network, you need 6 or more confirmations from different nodes (computers).
The types of mining
With the increasing popularization of cryptocurrencies, the word mining has acquired several meanings, or rather not meanings, but types, i.e. there were several types of mining:
- Conventional mining or mining with the help of equipment;
- Web mining;
- Cloud mining.
Investors say that solo mining is a thing of the past. And this is so, if you are going to mine bitcoin. Altcoins can successfully mine with his PC. A young cryptocurrency, for example, ZCash for specifically rely on algorithms to mine new blocks with the help of advanced graphics cards. Thus, they allow everyone to participate in the process of creating new coins.
Mining with equipment
When mining became a mainstream, its implementation with the help of ordinary personal computers became irrelevant, and began to gain popularity with the help of mining graphics cards with built-in graphics editor. But now cryptocurrency mining can be done at the expense of other types of computing equipment:
- Mining using a processor, the so-called CPU mining;
- Mining with GPU, GPU mining;
- Improved type of mining with graphics cards, called FPGA mining;
- And of course ASIC mining. ASIC is a specially developed equipment for cryptocurrency mining.
Cloud mining
At the moment, cloud mining is very popular. Cloud mining is a type of mining in which the user takes a remote lease oboroduvanie located at the company that provides cloud mining services. This type of mining has gained its popularity due to the complexity of the purchase of equipment in the CIS. Plus, if you do cloud mining, you do not need to configure and monitor the proper operation of the equipment.
Web mining
Web mining is the most unpopular type of mining, it is also called an alternative method of mining cryptocurrencies. Web mining takes place through the browsers of visitors to a special website, whose webmasters use the power of the computer of the visitor to the Internet resource for cryptocurrency mining.
When choosing the type of mining, pay attention to the most important indicator — profitability. To do this, estimate the level of necessary initial costs for mining and the amount of monthly expenses in relation to possible profits, and choose the most profitable option for yourself. When choosing a cryptocurrency for mining, be sure to take into account the complexity of its production at the moment, there are special sites that help to calculate the approximate earnings from the power of your equipment. The capacity of mining equipment is measured in mega hashes.
What is mining farm
Mining farm-a specially assembled “device”, which consists of equipment that allows you to engage in the extraction of virtual currencies (graphics cards, processors, power supplies, etc.). That is the ever-increasing complexity of the mining of cryptocurrencies, has forced craftsmen to come up with a setup that will have more power (more powerful hash rate) than ordinary personal computers. ASIC is one of the installations invented for mining. Mining farms come in completely different sizes. Starting from the farm on 4 graphics cards, ending with the whole hangars, hammered from the bottom to the top of the equipment and specially designed ventilation system. It all depends on the goals and capabilities of the miner.
Conclusion
Initially, cryptocurrency mining did not require special equipment and was available to everyone. But with each new block, the complexity of cryptocurrency mining began to increase. Therefore, now, to mine the popular bitcoin, you will have to buy not even top video cards, but special equipment that is created for mining cryptocurrencies. And also to pay mad bills for electricity. It is expensive and requires resources that ordinary people do not have.
