Interest in bitcoin and other cryptocurrencies continues to grow and investments in digital currencies are gaining popularity. That is why today we will focus on one of the most important issues related to investing in the network - we will discuss cryptocurrency mining. Are you wondering what mining is? How to start mining cryptocurrencies and does it pay off at all? Below we answer these and other mining-related questions.
Cryptocurrency mining, is an integral part of investing in digital currencies. Mining bitcoin, like any other cryptocurrency, is about validating new blocks and adding them to an existing blockchain. If at this point you are wondering what the block is for, we are in a hurry with the answer - this is the place where new coins are issued and subsequent transactions are approved.
Bitcoin mining enables cryptocurrencies to function properly in peer-to-peer technology. This process allows cryptocurrency users to:
Cryptocurrency mining is done by miners who have computers with adequate computing power - the so-called cryptocurrency excavators. The mining process is based on the Proof-of-Work consensus algorithm or its Proof-of-Stake alternative. In the case of the first method cryptocurrency mining involves performing complex mathematical calculations. The calculations are made by a special excavator computer with the computing power expressed by the hash function per second (H/s). Miners mining cryptocurrencies with this method can count on profits in the form of newly generated coins and commission from block transactions.
The Proof-of-Stake method is the most popular alternative to the expensive Proof-of-Work (let's face it, the purchase of a specialized excavator is quite an expensive investment). Proof-of-Stake cryptocurrency mining is possible on an ordinary computer, laptop or even an android smartphone! It is enough that you have a certain amount of coins - and the more cryptocurrencies you have, the greater your chances of mining more coins. The algorithm tracks a certain group of miners and rewards them depending on how many cryptocurrencies they have accumulated so far.
We already know what cryptocurrency mining is all about. So it's time to answer the key question - is mining profitable? Many cryptocurrency users who have purchased professional equipment and have taken to virtual mining seriously have come to the conclusion that mining cryptocurrencies does not always pay off. This is a very demanding field that requires a lot of computing power. If you are not convinced that mining bitcoin is an investment for you, start with the Proof-of-Stake method. It is a much cheaper and safer way to mine coins, although it does not bring such spectacular effects as Proof-of-Work.
If Bitcoin exchange is the topic you are interested in, be sure to see our posts on other issues related to cryptocurrencies. We invite you to read!