What is Cryptocurrency ? What Special About Cryptocurrency.
It is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds operating independently of a central bank. What it basically means is your current currency is issued by the Central bank and it’s like managed through a network of banks.
Therefore they are verifying it on each and every level and therefore you know to pay taxes and all that stuff whereas a cryptocurrency is not managed or operated by a central bank. And it is highly encrypted so no one can just hack in and see the Data if you own xyz funds or not so it’s really safe bitcoin was the first cryptocurrency developed in 2009.
Since then many new cryptocurrencies are formed and are known as alt coin crypto currencies are all based on decentralization. Which means they are not like operated by one known entity or one known computer they are decentralized. they are available on many network of Computers therefore it’s really hard to get data or to hack in and steal those funds in centralized banking.
And economic system such as the federal reserve system government control the supply of currency by printing paper money. That’s where you see that Government is saying interest rate will be increased they will be issuing more paper money and all that stuff if a country is good its currency rises. Otherwise its currency fall and that’s what you are seeing around the world.
Example Venezuela its currency is going down down down because they are printing more and more money each and every day. So you are in a fix Because the government knows how much money you want they can tax you and on the flip side they can print more money.
Which decreases the value of your money in your bank this is what a centralized banking or economic system is whereas in the case of decentralized cryptocurrency companies or government cannot produce new units therefore it’s not under any government Control.
Who invented cryptocurrency concept?
Satoshi Nakamoto invented world’s first cryptocurrency that is “Bitcoin” and many believe that this is his pseudo name. And he is hiding his identity for security reason. Apart from Bitcoin he also known to have built first “Blockchain” database.
Other Famous Crypto
In recent years this concept has gained popularity and many coins have evolved in the market. Few famous coins are (Ethereum, Litecoin, Ripple, Doge Coin).
For example, Ethereum helps you transfer money online to anyone anywhere in the world. Litecoin provides you affordable payment gateway solutions advanced ATMS and Wallets etc.
Ripple also is a payment solution. Doge coin well it basically does nothing apart from claiming to have supported creators to get some charity.
What is Crypto mining?
Crypto mining represents a process in which transaction for different types of cryptocurrencies are verified and then added to the Blockchain known as digital ledger.
Crypto mining is a current topic of interest and a popular activity as crypto usage itself has witnessed significant growth. A mining operation is similar to a data center.
The different is that people don’t have to sit behind a computer. Instead computers do the verification work autonomously and are programmed to solve difficult cryptographic puzzles in order to verify transactions.
How does Crypto Mining Work?
As part of the crypto mining process, volunteer coders which are called miners. Are in competition with each other in order to solve difficult math problems using high performance computers.
Each problem makes use of cryptographic hash functions that are associated with a block that inside has the transaction data for the cryptocurrency. The first miner that manage to solve the math problem or we say the first computer to solve the math problem is allowed to authorized the transaction.
For this service, the miner will receive a specified amount of the cryptocurrency they are working with. After the miner solves the math problems and verify the transaction information. They will add that data to the public Blockchain ledger.
Is Crypto Mining Expensive?
When Bitcoin was first created in 2009, crypto mining was highly profitable. Back then a miner would receive 50 BTC for solving a crypto puzzle which meant they received around $6,000 dollars.
The needed resources for crypto mining were minimal, so miners were able to keep most of the reward as pure profit. But in time the reward for Bitcoin has decreased (in order to keep it from becoming inflationary).
Currently, the reward sits at 6.25 BTC. Then again the price of Bitcoin has increased. So 6.25 BTC have a value of over 300K dollars. It is worth mentioning the cost of Bitcoin mining has also grown quite a lot.
This is a result of the fact that the competition has also increased. Which means that high performance computing is now absolutely necessary in order to mine the token.
This also leads higher cost of energy consumed in the process. So the energy bill can be really high based on where the miner lives and what type of hardware they use.
Is Crypto Mining Bad for the Environment?
There is a lot of talk about how crypto mining actually affects the environment especially. Some point out that bitcoin mining has a power consumption of 118.9 Terawatt-hour a year.
Which means it consume as much power as countries like the Netherlands or Pakistan. Others put that number even higher at 131.80 Terawatt-hour a year.
Which would mean the activity consumes as much as countries like Egypt, Malaysia or Argentina. But it is important to mention that energy consumption doesn’t equal carbon emission.
The industry is taking steps towards a greener way, which means that in a short time crypto currencies mining may become an eco-friendly activity.
Crypto mining is the process through which miners are solving complex math problem using high performance computers. For which they receive cryptocurrencies as a reward.
As Bitcoin become more popular, being a miner became harder. But the reward became more enticing. And for all talk about how crypto mining can contribute to earth pollution.
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