Crypto Mining for Dummies: How Does it Work?

Mining has been around for millennia. From the first human settlements in Africa to the peak of the Roman Empire, and even currently, mining continues to be the best (and only) way to acquire precious minerals.

But as we’re at the dawn of a new economic revolution brought about by our digitized word, no longer do we need to pick up an ax and start swinging it into rough stones to get gold and diamonds. Now, we can just do it by moving our hands and clicking our mouse. How? Through crypto mining.

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Don’ fret just yet, because cryptocurrencies are more valuable than you think! Take for example the most popular crypto to date — Bitcoin. It was worthless ten years ago, and now is now worth more than most objects you can think of.

At the moment of writing, one Bitcoin is equivalent to $9,900. Yes, it sounds like a lot, but take note that 1 BTC reached a peak value of $20,000 late December last year. It’s an incredibly volatile currency, but despite that volatility, people are still eager to hop on the bandwagon because of its potential.

The term “crypto mining” is a bit misleading because you don’t merely “find” cryptocurrencies. Instead, it’s the process of helping to secure the blockchain that is rewarded in newly minted cryptocurrency.

Crypto Mining in a Nutshell

Crypto mining is a computational process using complex computer hardware that deals with a series of mathematical equations. The main goal is to verify all the transactions that are present in the digital ledger,  this is rewarded with more crypto-coins.

Doing so makes you a vital part of the network. All the effort you exert, and the energy your computer uses is rewarded in the form of cryptocurrency. What’s great about this is that it can be done anytime and anywhere, as long as you have strong-enough computer hardware and an internet connection.

Take for example gold…

Mining crypto can be compared to mining gold. This is because the supply increases as more is acquired through the mining process. To mine crypto coins, you need to solve complex mathematical problems that only sophisticated computer hardware can do.

The level of complexity can also increase through time, so it can become harder to mine them. It’s just like mining gold because it becomes harder to mine through time, knowing that the reserves are diminishing. Crypto mining also needs more resources as time goes by. Thus, limiting the supply of crypto coins.

The Best Cryptocurrencies to Mine

Bitcoin might be the most popular cryptocurrency to date, but that doesn’t mean it’s the best crypto to mine. It might be if you’d go back to 2009 where it was still a low-profile crypto. But things have changed, and the up-front investment is continually skyrocketing.

Not to mention the increasing difficulty in mining it. It’s just not practical for small-scale mining, especially if you’re only using consumer-level hardware. Bitcoin mining is ideal for large-scale operations.

What you want to mine are scrypt-based cryptocurrencies like Dogecoins, Litecoins, and Feathercoins. These are the best cryptos for beginners because you can use a simple desktop computer to mine them. Though earning anywhere between 50 cents to $10 per day isn’t much, it’s still a more practical alternative because you won’t need to havean enormous capital to begin mining them.

Just remember that crypto mining becomes more difficult as more people hop onto the “crypto rush.” You will eventually need to upgrade your hardware and invest heavily in continue mining that specific cryptocurrency. But there’s a way around it, and that is by switching to new crypto coins that are easier to mine.

The Cryptocurrency Mining Process

Crypto mining is all about contributing time and energy to the blockchain-powered digital ledger. This is where crypto transactions take place. Mining provides bookkeeping services to the crypto’s network, with the help of computer hardware.

This is an energy-intensive process, that’s why you also need to make sure you keep personal costs, such as energy and hardware, to a minimum. You are then paid a small fraction of coins as a reward for your contribution, thus the term crypto mining.

Looking into the Future

Cryptocurrencies have so much potential. Not only do they make financial transactions easier, but they also make it more transparent and accessible to everyone.

Cryptocurrencies are currently shaping our world in more ways than we expected. It’s just a matter of time as to when this will make it to the mainstream. By the time that happens, we should be living in a better world that runs on a more sustainable financial model.

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