Cryptocurrency mining is also known as “bitcoin mining” is a process that gains new cryptocurrencies.
Before getting into mining things, We have to figure out some complications.
I told that cryptocurrency supply is limited in the cryptocurrency basics post. Yes, it is. but,
Why does this matter?
I want to share something with you.
You know that the bitcoin’s circulating supply is 18,057,912 BTC
But the max supply is 21,000,000 BTC. Then where’s the balance?
The balance of 2,942,088 BTC is the available bitcoins for mine. Which means 2,942,088 bitcoins still need to be mined.
That is the exact process of any cryptocurrency mining that I’m about to talk. To understand the cryptocurrency mining process, You need to understand the blockchain technology first.
Understanding The Blockchain Technology
Here’s the best part.
Every transaction you made with bitcoins is in “Blocks“. The transaction data is permanently recorded in files called Blocks. A ton of these kind of blocks connecting each other like a “Chain” This is called the Blockchain.
But the fact is, These transactions are encrypted with a unique algorithm.
2+3+4+5+8+7+9 = 38. You can see the answer is 38. But, You can’t tell how the answer comes from by only looking at the answer. This is how the transaction algorithm works. This is called the transaction hash.
This means something.
The blockchain cannot be tracked or hacked.
Check out this video.
Where’s this blockchain runs?
That’s where the miners come from. Millions of internet-connected computers run this blockchain. Simply known as the “Miners”.
The Mining Process
When you involve in blockchain to continue its transactions, You become a Cryptocurrency Miner.
But what is the benefit?
You’ll be rewarded with newly mined bitcoins during the process. In 2009 that bitcoin was started, The mining of bitcoin is easy.
But today bitcoin and cryptocurrencies are very popular among people. Millions of transactions has been generated already.
Bitcoin mining is so complicated nowadays.
Mining cryptocurrencies requires processing power. (To run the algorithm)
Mainly cryptocurrency mining divided into two categories
Hardware mining is like, CPU(Central processing unit) mining, GPU(Graphics processing unit). Nowadays mining bitcoin is going to need a massive hardware workstations.
Can You Start Mining?
Of course, you can. But you are going to need some powerful hardware (CPU, GPU), Power supply and sufficient cooling for them. And always connected internet.
Besides, You can try cloud mining. There are some recommended cloud mining platforms.
Now, It’s your turn
Have your tried Cryptocurrency mining?
Is it profitable?
What is your recommendation for cloud mining?
Let me know in the comments.