Education

Basic Concept of Mining Cryptocurrency

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In the previous article, I have discussed about mining bitcoin. In this time, I’ll explain the basic concepts of Mining Cryptocurrency and the devices used in mining them. Before we know more about the topic that I will discuss, it would be nice if we know what exactly Cryptocurrency is. Because there are many people who still do not know about it.

Cryptocurrency is a technology used to make digital currencies using cryptography. The goal is to prevent this money being faked. Unlike the printed banknotes or metals, this digital currency is produced through the completion of mathematical formulas. Any solution of such formulas will then be matched to the hash of an encrypted data on peer-to-peer networking technology. The price value of Cryptocurrency is determined by ‘buy’ and ‘sell’ power by technology users. Even, the companies like Google Ventures are also investing in this technology.

Cryptocurrency can be used for profit billing because the trade costs are 0% pure from barter or exchange process. At a site like hitbtc.com there are seven Cryptocurrencies such as bitcoin, litecoin, paycoin, nubits, rippe, darkcoin, degocoin. Which later can be traded to produce Cryptocurrency in the form of money. The nature that distinguishes Cryptocurrency from common money is its decentralized and secretive nature. Decentralized means that this currency is not regulated by a specific person or organization, including the author himself. So, the price can be expensive and then go down to be very cheap. Tranding in Cryptocurrency of course very easy to do, because the way is very simple, that is by buying a cheap price and sell it again with the more expensive price. This method can be called by finding the price difference. In a cryptocurrency, there is the term altcoin. Altcoin is a designation for Cryptocurrency other than in bitcoin or can also be called the equation of Alternate coin.

Mining Cryptocurrency runs on a blockchain that serves to update every time a transaction is made and also ensures the authenticity of the information, so it can be ascertained that every transaction and process is running correctly and safely. In this case, the miner as the main player in processing transactions by verifying the ownership of currency from source to destination. Each transaction contains a hash of a previous transaction by an owner in which the authenticity of the transaction is now tested, thus validating it. Miners also inhibit the double currency expenditure through this validation process. For their services, miners are paid crypto. Physical costs are printed as a cost by the vendor or merchant of each transaction. A person can get crypto through an exchange that is found online or trades it for the traditional currency. The value of cryptococcus varies by request and supply, although there is no fixed value for it. Buyers and sellers agree on a fair, fair value and are based on Cryptocurrency trading values ​​elsewhere.

The natural way to get Cryptocurrency is to mine with a computer by completing transactions from other users. In mining known term Thread used as a configuration that adapts to the device that we have. Then, of course, we need to adjust the amount of thread you want to use, to fit our device. If not then the miner’s business becomes less than optimal. Mining Cryptocurrency is done by using a specially designed machine called Mining machines such as CPUs to ASIC which are currently widely used.

The difficulties of the Mining Cryptocurrency process depend on the machine used. However, as technology grows, more and more new Cryptocurrency minerals are being used to simplify the workings of miners, such as GPU and FPGA. While the profitability of mining itself depends on several factors such asthe initial cost of mining rigs such as ASIC, engine hashing rate, total network hashing power and current hashing difficulties, electricity usage costs, current and future Bitcoin values.


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