These days the popularity of cryptocurrencies is increasing rapidly. In the beginning, only the name of Bitcoin was heard, but now many cryptocurrencies are in the market. In the name of cryptocurrency, many frauds have also started happening. While people are going crazy about cryptocurrency, on the other hand the government is taking a strict attitude about it and trying to make laws to regulate it. When it comes to cryptocurrencies, one rarely hears the term, such as Blockchain Technology or Cryptocurrency Mining. Let us tell you today about them and understand them in easy language.
What Is Cryptocurrency (Bitcoin) Mining?
On hearing the name of mining, the first thing that comes to mind is to dig gold, diamond or coal. Crypto mining or bitcoin mining means to create new bitcoins by solving puzzles. Let us understand in a little easier language. The way we do a transaction to send money to someone, it first goes to the bank and then the bank validates it and sends it forward. In the case of cryptocurrencies, there is nothing like a bank between the sender of the coin and the receiver, but only computers. Some people run these computers, through which every transaction is valid and faster. In return for their hard work, the miners get bitcoins. This is what is called bitcoin mining. Similar mining takes place in other cryptocurrencies as well.
What Is Blockchain Technology?
When a person sends cryptocurrency to another person, it goes to the transaction computers. Through these, cryptocurrency transactions are validated and included in the distributed ledger. All these transactions are recorded in a block and the size of this block is about 1 MB. When a block is filled, a new block is formed by blocking it and the new block is attached to the previous block. All these blocks are connected to each other, forming a chain C. For this reason it is called blockchain technology.
The Big Role Of Cryptocurrency Miners
The biggest challenge of digital currency is that digital platforms can be easily manipulated. This is the reason why only accredited miners in Bitcoin’s distributed ledger are allowed to update transactions in the digital ledger. Thus it is the job of the miners to ensure that there is no double spending on the network. This is why blockchain technology is used, in which information is present on every computer connected throughout the chain, making this technology extremely secure.
How Cryptocurrency Miners Earn?
Miners are rewarded with new coins for keeping the network safe. Since there is no central authority in distributed ledgers, the mining process is crucial for validating transactions. Only accredited miners are allowed to update transactions in the digital ledger. For this, a Proof-of-Work (PoW) consensus protocol has been built in. PoW also protects the network from external attacks.
The Use Of Big Machines And Computers In Mining
Crypto mining is similar to the mining of precious metals. Just as gold, silver or diamonds are mined, crypto miners release new coins into the circulation. For this such machines are employed which solve complex mathematical equations. The complexity of these equations continues to grow. Over time, miners have deployed more advanced machines to solve PoW. The scarcity of cryptocurrencies has also increased due to increased competition among miners.
Who Can Do Cryptocurrency Mining?
Cryptocurrency mining requires computers that have specialized software to solve complex cryptographic mathematical equations. In the early days of bitcoin, it could be mined from a home computer with a simple CPU chip, but that is no longer the case. Today this requires specialized software. It has to be connected with reliable internet connection round the clock. Every crypto miner is required to be a member of an online mining pool.