Mining Cryptocurrencies

What is mining and how does it work?

Mining is a process where special computers and software are used to solve math problems, and after solving them, these miners are given coins as an incentive. Transactions are approved through mining. As there are incentives given to miners, these attract more people to start mining. This in all ensures a more secure network.

For example, the Bitcoin network automatically changes the difficulty of the math problem depending on how fast they are being solved. Over the years, miners have come up with a better graphics card that works faster and it uses less energy. Now, as many people have joined Bitcoin mining, the difficulty to solve these problems increased as well. To combat that issue, miners have formed groups to pool mine together and the incentive is split up according to the amount of work that person has contributed.

Things to consider before you start mining

Do keep in mind that mining is not a place for you to make substantial money but it can be a hobby venture. Most profits are from mining Bitcoin however, it is only done by large-scale operations where they have the special mining computers and the resources to back the large energy consumption when mining coins. If you are interested in mining, do take note of the many things you’ll need before starting. Some of the things needed are: a good computer with mining chips, mining software package, good internet access and even a house fan, to cool down your devices. Of course, you will need to read up constantly about technology changes and also about mining techniques to maximise your success in mining coins. Remember to calculate the costs and profits of mining before getting started as well.