In many mining processes it is possible to participate only with a good graphics card, which work very well to solve mathematical calculations.
What is cryptocurrency mining?
Cryptocurrency mining refers to the set of processes necessary to validate and process the transactions of a cryptocurrency, the activity by which new cryptoassets are issued and confirm transactions in a Blockchain network. Performing it depends on the algorithm that the network uses to reach distributed consensus: Proof-of-Work (PoW), Proof-of-Stake, PoS or other.
In the case of Bitcoin, mining involves validating and recording transactions in Blockchain through PoW, a protocol that can also be found in cryptocurrencies such as Bitcoin, Litecoin and others. For this, all the nodes of the network participate in the successful resolution of the riddle that is the search of the block, in which the result of taking into account a random number and applying a cryptographic function is a hash that meets a specific characteristic.
This work requires effort and computing power, which ensures that it is complex to write new blocks of transactions in the registry and thus prevent an attacker from generating a false block and adding it to the network or modifying an existing block. But not all cryptocurrencies work in the same way, since the way to mine depends on the system that uses the blockchain or the algorithm of each cryptocurrency.
Economic benefit of mining
For the realization of this important work, the miners charge an amount of money for their mining work, and in the case of Bitcoin every time a miner finds a valid block, the miner is rewarded with 12.5 bitcoins. The payment is made with cryptocurrencies that are in reserve and then enter into circulation, which is why it is mistakenly often believed that cryptocurrency mining involves generating new currencies. The coins are already previously defined, however, through mining, new currencies are brought into circulation.
In the Proof of Work (PoW) system, miners use computers with powerful commercial or specialized processors to solve hash riddles that, once resolved, allow them to propose the next transactions block to add in the blockchain and collect the reward for it, valued in cryptocurrencies.
Ease and difficulty of mining
The ease or difficulty of mining cryptocurrencies depends on each of them. While Bitcoin is the first cryptocurrency and the most popular, there are currently more than 100 alternatives, also known as altcoins. Each of these currencies have their own mining algorithms and costs.
Ethereum is considered the second most used cryptocurrency after Bitcoin, and it is possible to mine it from a graphics card and specific software. If we compare it with Bitcoin, Ethereum is much easier to mine, thanks to the fact that it needs fewer resources. In many mining processes it is possible to participate only with a good graphics card, which work very well to solve mathematical calculations, even with a traditional computer, and the process can be carried out from home, as long as you have energy and stable internet.
This represents a relative ease in cryptocurrency mining, without needing the use of advanced equipment, but also the work will be more effective the better the equipment used. This is why people think that cryptocurrency mining is a matter of large companies and it is impossible to participate, which is partly true, but not because it is impossible, but because competition is so tough that it is very unprofitable to invest in the necessary equipment to mine.
Alternatives for mining
Generally, miners use common or more complex computers, which require a high power source in connection and electrical efficiency. They also require a stable and constant internet connection, but not necessarily a lot of bandwidth. And it is in these requirements that lies the difficulty of cryptocurrency mining, which leads to the evaluation of how profitable and productive this work can be in comparison with energy costs and equipment that demands its realization.
As a solution to use processes that reduce these costs, another option arises, Cloud Mining, which allows users to purchase hardware mining capacity in remote data centers, for an agreed pre-established time, which is actually a lease of computing capacity that avoids acquiring hardware and software for mining, power consumption and bandwidth, among other requirements of a mining center. This system avoids the inconveniences that mining equipment generates, as heat and excessive noise, installation of ventilation systems, electrical consumption, etc., but its disadvantages lie in the high probability of fraud.
Every day new protocols for cryptocurrency mining are developed, as in the case of our most recent development, Arian Coin, based on a global consensus algorithm, Proof of Achievement (PoAch), which represents an important facility for mining since it requires more participation from the human than from the machine, since it depends on the symbiosis between these two. This interaction results in a reward that is granted to the person who achieves a goal, defined outside the protocol context, that is, the definition of the goal or milestone is given by the app or game that interacts with the node.
In any case, it is not impossible for a common person to enter the world of cryptocurrency mining, but depending on which product you choose, or the way you want to do it, you will experience levels of ease or difficulty, and you will also obtain greater or lesser economic benefits.