Mining cryptocurrencies sounds quite mysterious. Not only does it require efficient computer hardware, but the process of solving mathematical operations looks quite complicated. What does the mining of subsequent units of cryptocurrencies by miners with the help of cryptocurrency miners look like?
Why should I have some knowledge about cryptocurrencies?
From year to year, virtual money is gaining more and more enthusiasts. A positive attitude is particularly common among the younger generations, who have no prejudices about the new form of money. Many young people have almost completely given up cash in favor of alternative payment methods. According to some, such a trend may be intensifying and cause major changes in the current financial system.
There are voices in the world about replacing traditional money with a virtual alternative. What's more, the number of people interested in cryptocurrencies is still growing. A good solution would be to find out what rules apply in digital currency systems.
You are probably wondering what a Bitcoin miner is? What does the process of mining cryptocurrencies by miners look like? What equipment should they have?
Let's start with the basics.
The Bitcoin excavator is distinguished by considerable computing power. It can be understood as an extensive personal computer, whose hardware resources have been directed to solving mathematical tasks with a high level of difficulty. They are a condition for confirming transactions made by users. It can be said that with the help of excavators, miners create new virtual coins.
Cryptocurrency mining was based on distributed computing, using the computing power of many interconnected devices, and they can be geographically dispersed. The performance of excavators is described in hashes per second.
Cryptocurrency miners use multiple graphics cards or specialized ASIC chips to perform calculations.
Cryptocurrency miners, and PC. What's the difference?
The computers used on a daily basis are largely similar to digital coin miners. They have similar components, software, available computing power. Still, home computers have low performance compared to Bitcoin miners. Excavators allow you to perform a huge number of calculations,thanks to the appropriate selection of components. The more powerful the components, the larger the hashrate, with a reasonably acceptable level of electricity consumption. In the case of the combination of many miners, their power increases,and at the same time the chance of issuing another Bitcoin unit increases. Many interconnected miners form a farm or cryptocurrency mine.
What is the Proof-of-Work (PoW) algorithm?
This is one of the most important algorithmson which the operation of the Bitcoin system is based. Initially, its task was to ensure the anonymity of Internet users. However, over time, other useshave been found for it . Joining a cryptocurrency network requires a complicated mathematical operation. It is so difficult that, unfortunately, the average PC will not have a great chance of solving it compared to specialized excavators.
Proof-of-Work, as the name suggests, is based on proof of work performed by a given device in the network. The rest of the devices verify the execution of the task, and in the case of incorrect calculation, it is not recognized by the system. The PoW algorithm enables a fair distribution of the reward for digging a block, taking as a criterion for the division the computing power of the equipment (excavator). Since a cryptocurrency miner consumes electricity,it is easy to measure the amount consumed. PoW easily checks how much of the prize goes to a given user. Since attacks on the network are very expensive in terms of energy and usually have no effect,they are simply unprofitable. Therefore, PoW is considered to provide a solid level of security.
ASIC, GPU, FPGA, what are they?
These are the types of Bitcoin miners, and more precisely the types of equipment used to mine cryptocurrency.
Mining cryptocurrencies with ASIC is the most economical solution, due to their low energy consumption. In addition, their performance is considered higher than that of the GPU. Moreover, their advantage is their small size. Unfortunately, they also have disadvantages. ASIC miners are designed for specific cryptocurrencies. For example, with an excavator designed for Bitcoin, you can only mine Bitcoin. The cryptocurrency market is extremely dynamic,new virtual currencies are constantly emerging. Unfortunately, having a dedicated excavator will make you limited only to a specific cryptocurrency.
GPU mining is really the use of computing units in graphics cards. Such miners are the most universal, because they can be used to mine all cryptocurrencies. However, they are not as efficient as ASIC excavators.
FPGA excavators are considered something like programmable logic gates. They draw not much electricity, producing less heat and are quieter. In addition, they are less prone to failure.
Ask yourself what you want to achieve. If you care about mining different cryptocurrencies, choose GPU miners. If you are focused on a specific cryptocurrency, you can opt for an ASIC or FPGA. Unfortunately, in any case, you will have to face the high price of the equipment. Despite this, in the era of high prices of virtual currencies, invested money can pay off very quickly.