What is mining in simple words
Every Internet user has ever heard of the word mining. With the advent of bitcoin, cryptocurrency began to gain huge momentum. As expected, people wanted to make money on it, and the story of mining began. But what is it? In this article you will learn about what mining is, how it appeared and whether it is possible to make money on it!
What is mining?
What is this way of earning? In English, the word mine means the extraction of useful metals and minerals, Yes, those in the mines! It would seem, what does the Internet and cryptocurrency have to do with it? Now we will understand, but to find out what mining is, we will learn the concept of blockchain, the Foundation of any cryptocurrency.
Blockchain – database of the future
Blockchain is a database into which blocks are written, forming a chain. This block chain cannot be edited or formatted from the outside. It is stored on many computers, and when a new block is written to one computer, it is updated at all. Blockchain is a decentralized and uncontrolled system, it is anonymous and at the same time completely open. The security of the blockchain gives it a huge scope, from financial transactions to paperwork. And most importantly, it cannot be hacked.
The first and most famous fruit of the creation of this system is bitcoin, released in 2009. Bitcoin transactions, like any cryptocurrency, are based on the blockchain, and thanks to it, the cryptocurrency is the most secure currency in the world. Bitcoin was the first crypt to be mined, and is still being mined.
The concept of mining
The essence of mining is very complex, and without immersion in the topic to explain this term will be difficult. To put it simply, it is mathematical calculations that are carried out on computers and mining farms. Thus, the miner generates a new link in the “chain” of the blockchain and receives a reward. The number of bitcoins earned directly depends on the computing power of the mining farm.
At one time, video cards just disappeared from the shelves, even appeared dealers who sold them at exorbitant prices. Does that explain why? More power means more money. Some people build mining monsters striking imagination. Mining farm with hundreds of graphics cards and the size of a production shop! Such farms consume a huge amount of electricity and have enormous computing power.
How to mine?
We found out what mining is, and I know what you’re thinking! One of the most important points of mining is the difficulty curve. The tasks that are provided to the computer to solve are becoming more difficult with each coin mined by anyone. This means that every year mining loses its relevance, because bitcoins are harder to mine, and it is almost impossible to do it on a desktop computer. There is even a specific number of bitcoins that can be mined – 21 000 000 BTC (now 17 000 000).
However, this is no reason to throw this idea! Now you will see the points that you need to start mining:
Create a bitcoin wallet. Fortunately, it is not difficult. Bitcoin wallets are hundreds and you can choose any of them. Even such large wallets as WebMoney have in their functionality the ability to create a bitcoin wallet. It’s a simple step, go ahead.
To choose a mining pool. A mining pool is a server that many miners are connected to. All computing power is added, and therefore production is much faster. Upon receipt, bitcoin is divided among all participants of the pool. Mining pool is not necessarily a condition, but if you do not want to buy expensive equipment, this option will be optimal
Choose a miner. After selecting the mining pool, you will need to download and install the miner program. Its choice depends on how you are going to mine cryptocurrency. The main mining programs are free and are in the public domain
This is a superficial instruction, more detailed you can find on the Internet.