Most people these days know about cryptocurrency, but don’t know how it’s created and distributed onto the market. This is done with a system known as cryptocurrency mining.
How cryptocurrency mining works
Cryptocurrency is maintained on a system called a blockchain, which is a distributed ledger on which cryptocurrency transactions are recorded on. There are copies of the ledger on computers all over the world, it’s almost impossible to hack it and change and duplicate transactions. In order to send or receive cryptocurrency, you need to have a cryptocurrency wallet, which is similar to the servers we use to send and receive emails. The wallet provides you with a public key, which is like your email address, and a private key which is like your password.
How do miners find cryptocurrency?
The public and private keys are made up of a unique series of numbers only one of which you provide to the person who is sending you the cryptocurrency. These numbers are used, along with the code for the cryptocoin, to create equations that are solved by cryptocurrency miners (that use various hardware, software and crypto calculations). The equations then become blocks on the blockchain.
When a miner solves an equation, they are rewarded with cryptocurrency. This is how new cryptocoins are introduced onto the market. The more people trying to solve an equation the more complex it will become; this is to make sure that the market is oversaturated.
What you need to get involved
Software: Due to the extreme complexity of the equations, they can only be solved using incredibly advanced software that solves them much faster than they could be solved by a person.
Hardware: This software has to be supported by specialized hardware created specifically to mine cryptocurrency.If you use a regular computer processor, or even graphics card, it could overheat and shut down. This can be bought online or created from scratch depending on the miner’s level of expertise.
Using the cloud
You can also use the cloud to mine. This is known as hash mining and requires no hardware. In the cloud, you’re renting hardware and software from a third party which they can use mine their own coins.
How much can you make as a crypto miner?
How much you make is very much dependent on how long you spend mining and how many equations you’re able to solve. Only the first person to solve the equation is rewarded with cryptocurrency. Mining can be quite expensive as you need to buy the specialized software. However, once you receive the full monetary value of the coin, you can own cryptocurrency without having to put any money in.
Is cryptocurrency mining legal?
Cryptocurrency mining is both a legal and integral part of the cryptocurrency system. Miner’s keep trading safe and fair by logging transactions on the blockchain, and monitoring and storing on the ledger. Without this system anyone would be able to hack the system and duplicate transactions for their own benefit. This would completely destabilize the system, and prevent cryptocurrency from becoming as valuable as it is today.
Crypotcurrency, like diamonds, only have the value afforded to them by people. At the moment, it’s more an asset than a currency, due to the trust people place in the system, and the limited supply that they have value in the first place. This is why miners are incredibly important – they help cryptocurrencies maintain their value.
If you are interested in cloud mining, we recommend HashFlare, a tried and trusted cloud mining service provider. There are options for every type of crypto miner and is an easy and affordable option.
You can select the package that suits you. These include different options for Wi-Fi packages based on the speed and data cap you you want. There are levels of packages for HashFlare based on minimum hashrate – the speed at which the computer completes an operation in the code – maintenance fees and type of hardware.