What is Crypto Mining? That crypto mining explained
What is Cryptocurrency?
Cryptocurrencies or digital currencies have taken the headlines by storm. Providing Privacy, bypassing regulators, and high returns on investments as well as financial stability in the market. With this hype, only very few people are aware of how to own or mine crypto.
A peek into crypto mining.
The competitive process verifies and adds new transactions to the blockchain for a cryptocurrency that uses the proof-of-work method.(credit : pcmag.com/)
Let’s have a look at it through a story to understand the definition of crypto mining.
Once upon a time, five friends Uno, Dos, Tres, Cuatro, and Cinco were traveling through a desert. All their resources were exhausted and did not have enough food or water to survive through the journey. A Sage named Sies passed along and he suggested they visit the Village nearby and follow his instructions to avail themselves of resources.
He told them to find all the money transactions happening in the village among people and keep track of it. Whenever they witness any transaction they have to report to the village chief who maintains a public record of the transactions visible to all. To report a transaction to the chief a puzzle has to be solved, and whoever gets the puzzle solved gets to report to the chief and get a reward!
The five then started to record all the transactions and worked on the puzzle day and night and got it solved!! The chief rewarded them on reporting the transaction and now this became a routine process. Day by day the puzzle became harder and the five friends started to do the puzzle as a group to get a higher success rate. The errors in solving puzzles became negligibly small!
The chief told them this process was kept to keep corruption in the village at bay. All the transactions were recorded and displayed in public so everyone can verify the transaction. So no tampering was possible.
Back to reality
The friends referred to in the story are the MINERS, each miner adds a new block into the blockchain on verifying a transaction taking place between two individuals, on solving a mathematical puzzle.
In the public space where the transactions are recorded is the BLOCKCHAIN. And the reward is the cryptocurrency aka BITCOIN!
There are a lot of questions asked related to Cryptomining. What? How? Where? When? Why?
Let’s dive in. Shall we?
WHAT?
Cryptocurrency is an encrypted data string that denotes a unit of currency. It is monitored and organized by a peer-to-peer network called a blockchain.
It doesn’t rely on banks to verify transactions.
It is a digital payment system that does not depend on banks to verify transactions. Rather than physical money carried around and exchanged, cryptocurrency payments exist purely as digital entries to a database describing specific transactions. Once you transfer cryptocurrency funds, the transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets.
HOW?
How can you get this digitally scarce object?
There are four main ways to obtain cryptocurrency:
- Use an ASIC Miner to mine crypto
- Purchase Crypto from an exchange like Coinbase or payment service like CashApp
- Investment brokerage
- Find a cryptocurrency ATM
ASIC Miners
The application-specific integrated circuit is an integrated circuit chip is designed for a single specific purpose — mining crypto
Since they are built for this sole purpose they are the most powerful device for mining crypto, however, they lack flexibility even though they are the most powerful.
Each ASIC Miner is built for different crypto — meaning for each different algorithm there are different ASICs. As a result, each ASIC miner is capable of mining a single proof of work algorithm, which means an SHA-256 ASIC cannot mine Ethereum.
They are constantly competing with their previous versions hence they are always updated with the hardware available.
Different ASICs are required for each of the below algorithms
- SHA-256 (Bitcoin, Bitcoin Cash).
- Ethash (Ethereum, Ethereum Classic).
- Eaglesong (Nervos Network).
- X11 (Dash).
- Blake256R14 (Decred).
- Scrypt (Litecoin, Dogecoin).
- Equihash (Zcash, Bitcoin Gold, Horizen).
- Kadena (Kadena).
- Several others, such as Handshake, Cuckatoo32, Blake2B-Sia, and CryptoNightR.
We are likely to see more powerful updated ASICs to be in the market as crypto mining is getting more popular.
WHERE?
If you have decided to spare some time and give ASIC mining a shot, we will help you pick the best crypto mining hardware. Choosing an inefficient ASIC miner can be devastating and you might end up with zero profits.
It is not only the Mining RIG specifications we have to look upon, there are a few more factors to be put into consideration, such as COST, SPACE, TIME, ENERGY.
SEGMENTS helps you cover the above-said concerns. We have a dedicated HOSTING space for those who have space limitations for crypto mining and can also get expert assistance on your MINING RIG. Thus saving your time and hence boosting your ROI up to 65%.
High-speed and top-notch performance to rip through the most intense mining experience.
Featuring the exclusive collection of ASICs from the best brands at SEGMENTS.
I will be diving deep into crypto in my upcoming blogs. Stay tuned!
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