Mining And How It works

 

WHAT IS MINING AND HOW IT WORKS

Mining includes extraction of metals and minerals, like diamond, coal, gold, platinum, Silver, copper, tin and iron. … Some mining is done by scraping away the soil (dirt) from the surface of the ground. This is called surface mining. Some mining is done by going deep underground into a mine shaft.

The focus here is on crypto mining. Mining is the mechanism used to introduce Bitcoins into the system. The main purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus. Miners are
any paid transaction fees as well as a “subsidy” of newly created coins.

This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating
people to provide security for the system.

Mining requires a computer and a special program, which helps miners compete with their peers in solving complicated mathematical issues. This would need high computer resources. In regular intervals, miners would
attempt to solve a block having the transaction data using cryptographic hash functions.

The hash value is a numeric value of fixed length that uniquely identifies data. Miners use their computer to
zero in on a hash value less than the target and whoever is the first to crack it would be considered as the
one who mined the block and is eligible to get rewarded.
The reward for mining a block is now 12.5 bitcoins.

A complete mining kit consists of graphics cards, a processor, power supply, memory, cabling, and a fan,
which would cost between $2,400 and $3,800 on Amazon.com, Inc. (NASDAQ: AMZN), according to Bloomberg.

The top three mining hardware, according to 99bitcoins.com, are Avalon6, AntMiner S7, and AntMiner S9.

Given that existing GPUs aren’t powerful enough, miners are now flocking to application-specific integrated circuits or ASICs. To circumvent this shortcoming, Nvidia and AMD are said to be working on GPUs, which
could be used specifically for the purpose.

The two companies who are dominant in consumer-grade mining hardware are Canaan and Bitmain. Bitmain, based
in Beijing, does mining as well as manufactures mining hardware.

At the early stage, only cryptography enthusiasts served as miners. However, as cryptocurrencies gained in popularity and increased in value, mining is now considered a lucrative business. Consequently, several
people and enterprises have started investing in warehouses and hardware.

Mining Pools And Their Share Of Mining

 

Source: Block Chain
Mining pools are concentrated in China, which boasts of 81 percent of the network hash rate.

What Is Cryptocurrency?

Cryptocurrency, as the name suggests, is a form of digital money designed to be secure and anonymous in most cases. It uses a technique called cryptography — a process used to convert legible information into an almost uncrackable code, to help track purchases and transfers.

Giving a simple definition, Blockgeeks say it is just limited entries in a database no one can change without fulfilling specific conditions.

Cryptography is a technique that uses elements of mathematical theory and computer science and was evolved during World War II to securely transfer data and information. Currently, it is used to secure communications, information, and money online.

Cryptocurrencies allow users to make secure payments, without having to go through banks.

Some cryptocurrencies include bitcoin, Bitcoin Cash, Ethereum, DigitalNote, LiteCoin, and PotCoin.

Bitcoin has the distinction of being the first cryptocurrency, having been introduced in 2009. Since then,
this class of cryptocurrencies mushroomed, with more than 900 currently active.

How Cryptocurrencies Work

A cryptocurrency runs on a blockchain, which is a shared ledger or document duplicated several times across a network of computers. The updated document is distributed and made available to all holders of the cryptocurrency.

Every single transaction made and the ownership of every single cryptocurrency in circulation is recorded in the blockchain. The blockchain is run by miners, who use powerful computers that tally the transactions.
Their function is to update each time a transaction is made and also ensure the authenticity of the information,
thereby ascertaining that each transaction is secure and is processed properly and safely.

As payment for their services, miners are paid physically minted cryptocurrency as fees by vendors or
merchants of each transaction.

The value of the cryptocurrency fluctuates based on demand and supply, although there is no fixed value for it. Buyers and sellers agree on a value, which is fair and is based on the value of the cryptocurrency
trading elsewhere.

Since there is no intermediary like bank involved in the transaction, as it is a peer-to-peer transaction,
the transaction fee that is associated with credit cards is eliminated. The identity of the buyer and seller are not revealed. However, each and every transaction is made public to all the people in the blockchain network.

One can acquire a cryptocurrency through exchanges found online or trade it for traditional currencies.

Assume Mr. A wants to buy an item valued at $20,000 and he realizes that the seller B accepts cryptocurrency,
say bitcoin, as a form of payment. A scout’s around to find the prevailing exchange rate, say $2,000 per currency. A gets B’s public Bitcoin address from B’s website, though both parties remain anonymous to each other.
Mr. A can now instruct his Bitcoin client or the software installed on his computer to transfer 20 bitcoins from his wallet to B’s address. A’s Bitcoin client will electronically sign the transaction request with his private key known only to him. A’s a public key, which is public information, can be used for verifying the information.

When A’s transaction is broadcast to the Bitcoin network, it would be verified in a few minutes by miners.
The 20 bitcoins will now be transferred to B’s address.

Cryptocurrency mining includes two functions, such as adding transactions to the blockchain (securing and verifying) and also releasing new currency. Individual blocks added by miners should contain a proof-of-
work, or PoW.

THE BEST CRYPTO MINING SITES:

1. BTC.com: BTC.com is a public mining pool that can be joined and mines 15% of all block. …

2. Antpool: Antpool is a mining pool based in China and owned by BitMain. …
3. Slush: Slush was the first mining pool and currently mines about 11% of all blocks. …
4. F2pool.
5..ViaBTC.
6. BTC.top.
7. DPOOL.
8. Bitclub.Network: Network. Bitclub Network is a large mining pool and could be one of the best Bitcoin mining pool to join.
9. BW Pool
10.BTCC
11.BIXIN

READ MORE: 

Blockchain ( cryptocurrency) in Nigeria

Standard bank to speed up forex payments with blockchain.

Blockchain Revolution in Banking

Blockchain, how effective

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