What is Cryptocurrency?

Cryptocurrency

 

A cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.  

Mining

 is the process of adding transaction records to Bitcoin's public ledger of past transactions. This ledger of past transactions is called the blockchain as it is a chain of blocks. The block chain serves to confirm transactions to the rest of the network as having taken place. Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere. Mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual blocks must contain a proof of work to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the hashcash proof-of-work function.The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus. Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a "subsidy" of newly created coins. This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.Bitcoin mining is so called because it resembles the mining of other commodities: it requires exertion and it slowly makes new currency available at a rate that resembles the rate at which commodities like gold are mined from the ground.  

Three Types of Mining

Mine Using Your Own Hardware

 With this option you would buy your graphics cards, build the mining rig and run it at your house using your own electricity and internet connection. The internet connection isn't such a problem if you have an uncapped account (around 30GB per month), but if you have 6 GPU's you could use up to 1 kilowatt-hour electricity. That means you could use 24 units per day. 

Mine in the Cloud

  Cloud Mining is the process of bitcoin mining utilizing a remote datacenter with shared processing power. This type of cloud mining enables users to mine bitcoins or alternative cryptocurrencies without managing the hardware.

Mine in a Pool

A mining pool is the pooling of resources by miners, who share their processing power over a network, to split the reward equally, according to the amount of work they contributed to solving a block. 

Miners


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