When we talk about cryptocurrencies we are delving into the universe of digital currencies. Exactly as the term itself states we are talking about a currency in the form of crypto, thanks to a complex blockchain system. When mentioning cryptocurrencies inevitably we come to talk about mining them. Let’s find out what it is specifically.
What is cryptocurrency mining
Let’s start by talking specifically about cryptocurrency mining. By this term we mean that activity apt to actually “create” new portions of cryptocurrency. This is possible thanks to the use of the energy of very powerful hardware that goes to extract very small portions of cryptocurrency, obtaining new currency for one’s digital wallets. Going down to the specifics, we speak of mining when a real decentralized computational process takes place that serves to process, protect, verify and synchronize all cryptocurrency-related transactions. Cryptocurrency would then be the reward for the “mining process” through which miners must use enormous amounts of energy.
Suffice it to say that cryptocurrency mining comes to amount to 0.5 percent of the world’s electricity consumption, a disproportionate amount! Each miner using a specific piece of hardware can operate solo or pool mining, that is, harnessing the computing power of several different elements. There are also different ways to do mining, from cloud mining to exploiting special apps and online platforms. In short, it is a vast and complex world that is increasingly capturing the attention of those who wish to enter the world of cryptocurrencies or further increase their digital wallets.
What is blockchain
To best understand crypto mining, it is important to understand precisely what we are talking about when we analyze the technology named “blockchain.” The blockchain is a real database within that is stored data in the computers of users around the world. The blockchain is thus a distributed “peer-to-peer” repository, without any kind of main authority that keeps an original copy of the data. This database is structured in the form of a blockchain (hence the term itself), and each blockchain contains some information. When a new number of data items is added these form another block that hooks up, concatenating to the previous one.
There are three key elements in each block: the hash code, which is an alphanumeric code of the data and is unique to each block; the hash code that precedes it in the chain, which is the code that maintains the chronological order of composition; and the time stamp that specifies the precise moment when the block was created. These three elements basically make the block absolutely unchangeable. The possible alteration of the blockchain would be immediately apparent due to the fact that if someone attempted to alter a block, inevitably they would have to change the codes within it, causing them to no longer match those of the block that preceded it. This makes blockchain technology among the most secure of all.
How mining works
After also evaluating blockchain, we can go back to talking about mining, and precisely on a practical level, mining involves very powerful computers solving digital number puzzles, consuming high amounts of energy during this action, thus generating actual value through crypto. The very interesting thing about mining is that, on a practical level, it does not involve any kind of human intervention other than preparing the equipment needed to get going. In fact, once the process is set in motion, it will be the computer itself that will proceed, without the need for any kind of direction. This type of equipment is going to consist primarily of hardware, as already mentioned, or very powerful graphics cards. Often, ASIC hardware models are used due to their superior power compared to traditional GPUs or CPUs. Then there are methods for mining that do not involve the use of specific equipment, at least not one’s own. There are alternative methods, such as using smartphone applications, search engine extensions, or ad hoc platforms that offer monthly or annual subscription plans for remote mining. This process is possible and is called “cloud mining.”
By “cloud mining,” we mean mining activity in which we do not have to procure major, high-value hardware but simply “rent” in the cloud the space in which to mine. You can literally rent the equipment with which to go about mining so that you can make a profit without having to invest in extremely powerful and expensive devices. Undoubtedly, this is the easiest way to generate cryptocurrency without having to make a huge investment. The most interesting thing about these types of services is that all the burden of setting up, maintaining, and renewing the equipment falls directly on the owner of the computer that will be used remotely. These methods allow you to relax and focus solely on generating passive crypto income.
Revenues from cryptocurrency mining
Cryptocurrency mining is a fascinating and absolutely useful method for you to be able to generate attractive revenues. Obviously, the portion of cryptocurrency that is produced from time to time is not huge, and it all depends on the hash rate, or, in Italian, hash rate. The latter is the numerical value that determines the total number of computational operations that a miner or pool can perform.So, after all, it all depends on the computational power of the equipment used for mining. There are some platforms that are able to estimate the investment required to achieve certain amounts of cryptocurrency. For example, the HashShiny platform proposes an annual return of $941 for Bitcoin mining and $936 for Ethereum mining, all with a $1,000 deposit and an average computing power of 20,909 GH/s.
Definitely, cryptocurrency mining will not be the best and only solution to get rich, but using it to increase one’s digital wallet can be interesting and can be done without requiring special effort or investment. It is important to note, then, that although the amounts of crypto mined are minimal, the value of cryptocurrencies is continuing to grow by leaps and bounds, meaning that the very small portion mined today could turn out to be a real treasure tomorrow!