- April 26, 2022
- Posted by: Ms. Mariam
- Categories: Blog, News
What is Cryptocurrency?
A digital currency that operates in a decentralized manner and uses encryption. No central bank or government regulates this currency. Cryptocurrencies are secure because of the transactions on a Blockchain. Cryptocurrency holders use private keys to verify that they are owners of their cryptocurrency.
Top 10 Cryptocurrencies
1: Bitcoin (BTC)
2: Ethereum (ETH)
3: Binance Coin (BNB)
4: Tether (USTD)
5: Solana (SOL)
6: Cardana (ADA)
7: US Dollar Coin (USDC)
8: XRP (XRP)
9: Terra (LUNA)
10: Polkadot (DOT)
What is Crypto Currency Mining?
Mining is the process of generating new coins by solving computational puzzles. It involves validating cryptocurrency transactions on a blockchain network and adding them to a distributed ledger. In a more technical sense, cryptocurrency mining is a transactional process that involves the use of computers and cryptographic processes to solve complex functions and record data to a blockchain.
Mining involves three major steps
1. Hardware setup(powerful computer equipment like a graphics processing unit (GPU) or, more realistically, an application-specific integrated circuit (ASIC).
2. Wallet Setup (Binance etc.)
3. Wallet Address
How Cryptomining Works (an In-Depth Look at Blockchain)
A blockchain is a series of chained data blocks that contain key pieces of data, including cryptographic hashes.
There are several key components and processes involved in the creation of a blockchain.
These are the individuals and devices that exist within the blockchain (such as your computer and the computers of other cryptocurrency miners).
Miners are the specific nodes whose jobs are to verify (“solve”) unconfirmed blocks in the blockchain by verifying the hashes. Once a miner verifies a block, the confirmed block then gets added to the blockchain. The first miner who announces to the rest of the nodes that they’ve solved the hash is rewarded with a cryptocurrency.
A transaction is an exchange of cryptocurrencies between two parties. Each separate transaction gets bundled with others to form a list that gets added to an unconfirmed block. Each data block must then be verified by the miner nodes.
These one-way cryptographic functions are what make it possible for nodes to verify the legitimacy of cryptocurrency mining transactions. A hash is an integral component of every block in the blockchain. A hash is generated by combining the header data from the previous blockchain block with a nonce.
A nonce is crypto-speak to describe a number that’s used only once. Basically, NIST describes a nonce as “a random or non-repeating value.” In crypto mining, the nonce gets added to the hash in each block of the blockchain and is the number that the miners are solving for.
6. Consensus algorithm
This is a protocol within blockchain that helps different notes within a distributed network come to an agreement to verify data. The first type of consensus algorithm is thought to be “proof of work,” or PoW. To earn new bitcoins, you need to be the first miner to arrive at the right answer, or closest answer, to a numeric problem.
Each block contains a list of completed transactions. Blocks, once confirmed, can’t be modified.
The blockchain itself is a series of blocks that are listed in chronological order. Because previously published blocks can’t be modified or altered after they’ve been added to the blockchain, this provides a level of transparency.
A Step-by-Step Look at the Crypto Mining Process
1. Nodes Verify Transactions Are Legitimate
2. Separate Transactions Are Added to a List of Other Transactions to Form a Block
3. A Hash and Other Types of Data Are Added to the Unconfirmed Block
4. Miners Verify the Block’s Hash to Ensure the Block Is Legitimate
5. Once the Block is Confirmed and the Block Gets Published in the Blockchain
Methods to Mine Cryptocurrency
1. Cloud Mining
2. CPU Mining
3. GPU Mining
4. ASIC Mining
1. Cloud mining
Cloud mining is a process where you pay someone (most often it’s a big corporation) a specific amount of money and “rent out” their mining machine called a “rig”, and the process of mining itself. Earnings that the rig makes (minus the electricity and maintenance costs) are transferred to your cryptocurrency wallet.
2. CPU mining
CPU mining utilizes processors to mine cryptocurrencies. It used to be a viable option back in the day, but currently, fewer people choose this method because CPU mining is EXTREMELY slow. It’s also usually not worth it you make very little amounts of money, but you probably spend ten times that amount on electricity and cooling.
3. GPU(Graphic Processing Unit)Mining
GPU mining is probably the most popular and well-known method of mining. Cloud miners, use GPU rigs & they have hundreds of rigs. GPU rigs utilize graphics cards to mine cryptocurrencies. One standard rig is made out of a processor, a motherboard, cooling, rig frame and – of course – a few (2 – 8) graphics cards. Cost of 1 rig around 3000$
4. ASIC(Application-Specific Integrated Circuits) Mining
ASIC produce insane amounts of cryptocurrency when compared to its competitors’ GPU and CPU but this one is not recommendable because ASICS are so powerful, they rob other miners who are using GPU or CPU majority of earnings would go to one miner with an ASIC farm.
How does a Rig look like
Mining and Pakistan
Cryptocurrency mining is in fact legal, small scale mining in your house it won’t be an issue, but if you wanna make a mining farm and move to Industrial Scale mining you will have to get a NOC from the government, the procedure of getting NOC is still ambiguous.
Whole Mining project is based on 24 hours operations and for that we need to have a high power electricity inflow 24/7. Miners necessitate fan replacements due to the high temperatures of the machines. 80% – 90% areas of Pakistan are mostly having hot weather comparatively to KPK area where the hottest temperature does not go beyond 30% – 35%