What is Bitcoin and Ethereum mining?

How exactly does Ethereum and Bitcoin mining works, how about the other coins?

If you are reading this you are probably already a miner but what does mining actually mean and what does it do? how does it work and finally what is proof of work?

In this article, we will go over a few of these subjects and try to shine some light on how Bitcoin, Ethereum, and other cryptocurrency mining works.

What is mining

Mining is the act of securing a network and confirming every transaction that is made on that network and for that reason is a very important part of the blockchain ecosystem.

When it comes to Ethereum mining means that we are writing and confirming blocks within the network and every block is then added to the previously written block, once the blocks are written and added to the chain it can never be re-written or removed and this creates the blockchain. When a GPU starts mining it actually starts solving very demanding and hard computational calculations, once they are solved and submitted to a pool with the rest of the workers(GPUs) it eventually creates a block. The block contains contain transactions and smart contracts.

Mining is not only securing the network but ensuring that is decentralized meaning that all the GPUs and computational power for calculating those hard mathematical queries are not stored in one place or are under the governance of one person or entity. Mining was designed to be of easy access to most people but with time and with the DAG size increasing every 100 hours Ethereum mining requires some specific kind of hardware such as GPUs with at least 4 or more GB of VRAM but other than that it’s fairly easy to start mining it today especially if use our Mining OS — Simple Mining. The easier it is to mine a coin the easier it is for it to become decentralized and to be spread all around the world.

What is Proof-of-Work

Proof-of-work is also known as POW is what we just described above, when we mine a block we actually do work and have proof of it with the mathematical queries we solved.

It is important to note that POW is all about the race the faster you can submit the solved queries the more likely you are to be rewarded for solving that block, that’s why we see big mining pools getting more blocks while a smaller mining pool getting less block although some luck is involved.

POW is a consensus that was first created and introduced by Bitcoin back in 2009 and more than ten years later it still uses the same POW algorithm to confirm blocks and secure the network making POW a trusted and unbreakable algorithm that so far nobody was able to create a better and more secure one.

We recommend that you read our article about the next upgrades coming to Ethereum and the beaconchain how they plan to move from proof-of-work to proof-of-stake.

What is required to start mining?

— Ethereum

Like we mentioned above mining Ethereum is rather simple and you can start mining it with your own personal computer as long as it has a discrete Graphic card with 4GB of VRAM or more (ideally you want a 6GB GPU or higher), if you want to make a profit and maybe even make some good money you will need a mining rig that consists of several graphic cards all plugged into a single motherboard with the help or riser, please read our article how to start mining Ethereum and other cryptocurrencies.

— Bitcoin

To directly start mining Bitcoin you need a specialized type of hardware called ASIC(application-specific integrated circuit), these are usually made in China by companies like Bitmain and their sole purpose is to mine Bitcoin, unlike the GPUs that serve miners and gamers and even content producers that edit or do workloads on them.

— Other currencies

Other cryptocurrencies such as beam, grin, rvn, or ethereum classic are mined also with GPUs but there are some like Monero that are more profitable and designed to be mined with CPUs. Just like Ethereum for more profit, you would need to set up a mining rig for these coins also.

Hopefully, this article helped miners understand better where they are investing their money and why their GPUs make so much noise while mining, give them break guys they are doing hard math.