What Is Cryptocurrency Mining?
The digital currency is generated by the process of mining. A lot of processing power is required for this mining process and it is quite an intensive work. There is a cryptocurrency public ledger of any transactions from the past and to add further any transaction records the process of mining is used. The block chain or what we call the chain of blocks is the ledger of these past transactions. As and when the transactions have taken place and through the rest of the network this block chain confirms these transactions. The legitimate cryptocurrency transactions which attempt to again spend the coins or currencies which already have been spent somewhere else are distinguished using the block chain.
The blocks which are found each day by the miners, should remain steady and for that the mining is designed in such a way that they are difficult and resource-intensive. A proof of work has to be there in the blocks so that these works can be considered valid. Whenever any kind of cryptocurrency node receives a block, the proof of work is verified. To reach a tamper resistant and secure consensus is the main purpose of cryptocurrency mining. Cryptocurrencies are introduced in the systems with the help of this mining technique. Miners are also there who are paid for their transactions and those are given as subsidy for the coins that are newly mined. Just as the mining of any kind of commodities the mining of the cryptocurrencies are also done in the same way and thus it is called so. The rate of mining such cryptocurrencies is just same to the rate of mining the other commodities like gold are mined from below the ground and from other sources.
1. The Mining Ecosystem
- CPU Mining: Previously people used their CPUs for mining the cryptocurrency till GPU came into the field and made the CPU Mining unwise when compared to GPU mining. The cost of operating the CPU goes much higher than the rate at which the cryptocurrencies are generated.
- GPU Mining: This mining is quite efficient and drastically fast than the CPU mining processes. Popular documented mining rigs are available.
- ASIC Mining: In this process of mining the ASIC integrated chips are used which were first released in 2013. Compared to GPU and CPU mining ASIC mining, they are faster for the amount of power that they consume and have made CPU mining setups unwise in most of the developed countries.