What is Crypto Currency Mining?
It’s somewhat misunderstood as the process of “ finding coins” but it’s more complex than that.
Miners verify the transactions on blockchain, ensure independently that they aren’t false, and keep the infrastructure humming along. The reward for doing so is a miner’s fee.
Blockchain technology is the immutable ledger for Bitcoin and other crypto coins that they are built on.
Blockchain is a secure electronic ledger, connecting multiple parties in a network of trust and integrity, facilitating the transfer of assets and the information pertaining to those assets. Blockchain was created as the means by which Bitcoin could be legitimized as an electronic currency.
Blockchain technology has evolved and now it has become a trading platform by bringing parties together in a trusted network without a third party. There are manay benefits that come with blockchain:
- Efficiency- The blockchain can dramatically streamline transactions, reduce time, and cost for transactions.
- Auditability- Each transaction is recoreded sequentially and indefinitely.
- Transparency- By providing details of transactions, trust can be enlisted with the process.
- Security- Each transaction is verified within the network using verified complex cryptography.
So every single transaction is encrypted. Once that encrypted transaction happens , it’s added to something called a “block” until a fixed number of transactions has been recorded. That block then gets added to a chain. Hence the name “Blockchain” which is publicly available.
This is where the Crypto Miners come in. Since these blocks are heavily encrypted, they are like complicated math equations. Crypto miners use high power computers, graphic cards, and software Algorithims to solve these problems.
The reward for solving these equations is crypto coins. The amount of the payment is based on how much their hardware contributed to solve these math problems. The block is solved and coins are distributed to the miners. This increases the coin’s supply.
In the case of Bitcoin, there are only 21 million Bitcoins that can be mined in total. Once miners have unlocked the 21 million, the planet’s supply will essentially be tapped out.
Once the blocks are solved, the coins are paid automatically to the miners crypto wallet or a online crypto currency exchange. These exchanges can hold many different types of coins.
My Ether Wallet is a free, open –source, with client side interface. My Ether Wallet allows you a way to interact directly with the blockchain while remaining in full control of your keys and your funds.Many investors in ICO’s will use My Ether Wallet to store their newly issued coins.
The most popular crypto currency exchange in the US is coinbase.com. Coinbase is fairly easy to use, but now has several steps of verifications for your bank account and driver’s license.
Coinbase offers exchange of 4 major coins. These coins are Bitcoin, Bitcoin cash, Ethereum, and Litecoin. Coinbase allows you to turn money into coins and coins back into money. Most Coinbase investors have a verified bank account to move money between coinbase and their bank account.
The miners are people or companies independently verifying transactions on the coin’s network, and when that happens more coins are created. Miners effectively keep the network running and increase the coins global supply.
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