Steemit Crypto Academy Contest / S9W5 - "Cryptocurrency Mining"
Greetings! I hope you all are fine. This is my entry post in this wonderful Community. Topic for this week is very informative. Thank you Steemit Crypto Academy for organizing this contest about "Crytocurrency Mining". Mining always play an important role in generation of new coins and validating transactions on Blockchain. Mining always prevents from double spending within distributed network. Let's start properly.
What is cryptocurrency mining? How does it work? Can STEEM token be mined? |
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1 ) What is Cryptocurrency Mining ?
Cryptocurrency Mining is a process of verifying and adding transactions. It also refers to generate new units of the Crytocurrency. It is fundamental mechanism for the security and integrity of decentralized currencies like Bitcoin. Mining was primarily associated with Bitcoin. But as the popularity of Cryptocurrencie grew up some other currencies also adopted mining for generating new coins and validating transactions such as Ethereum , Litecoin , Montero.
A miner utilizes powerful computers or mining graphic cards just to solve computer mathematical puzzles. Nature of these puzzles is cryptographic. These puzzles are involved in finding a specific Hash value that meets the specific criteria. So in this regard Miners compete with each other to solve these puzzles . The first miner who find the valid solution is rewarded with specific amount of newly mined cryptocurrency.
2 ) How does it work ?
The cryptocurrency mining process serves multiple purposes such as it validates and verifying transactions and add them in blockchain distributed ledger and also uphold the security of decentralized blockchain. Becuse this prevent the double spending where same digital currency is used for multiple transactions. It also secures the network by making it computationally expenses with transaction history. It acts against fraud and manipulation. It would require an immense amount of computational powers to alter past transactions.
Mining pool has also significant in mining. Individual miners join mining pool where they combine their computing power. They share the rewards based in their contribution. So in this way less Powerful graphic cards are allowed to participate. Cryptocurrency mining works on a specific set of principles and processes. Transaction Verification, Hashing , Proof Of Work (PoW) , Difficulty Adjustment and Finding the Solution , Block Validation and Reward and Consensus Mechanisms.
3 ) Can Steem Token Be mined ?
As we know STEEM is the native token of the Steem blockchain and it operates on a different consensus mechanism that is known as Delegated Proof Of stake (DPoS) . In DPoS STEEM tokens are not mined in the traditional way. STEEM Tokens are distributed through a process called " Witness voting" & "delegated proof of stake ." Witnesses responsible for validating and producing blocks. So I would say that No , STEEM token can't be mined like traditional Cryptocurrencie such as Bitcoin and Ethereum.
STEEM token were intialy distributed by a process that is known as Proof of Brain PoB). It's a mechanism in which users earn Steem Tokens by creating and curating content. So , Now Steem Token can't be achieved through Mining. It's primarily driven by Participation of users and Engagement within platform. In a nutshell, STEEM Tokens are archived through witness Voting and delegating stake in the Steem network e.g DPoS.
Name The various types of mining methods for cryptocurrency |
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There are several types of mining methods that are bases on specific Cryptocurrency and here are some mining methods for Crytocurrency. Each method has its own advantage and specific requirements :
- Proof of Work (PoW)
- Proof of Stake (PoS)
- Proof of Capacity ( PoC)
- Proof of Elapsed Time (PoET)
- Delegated Proof Of Stake ( DPoS)
- Proof of Authority (PoA)
Have you ever been involved in cryptocurrency mining? If yes can you share with us how you mined this coin? |
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To be very honest , I have not been involved in cryptocurrency mining. The main reason is legal Restrictions. Crytocurrency Mining is banned in our country Pakistan. The second reason is lack of mining equipments and and high costs mining rigs. So therefore , I have not been involved in mining.
Give some of the Importance and benefits of cryptocurrency mining |
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Cryptocurrency Mining has several benefits and significance. Here are some Importance and benefits of Cryptocurrency Mining.
Mining plays a fundamental role in validating and securing cryptocurrency transactions. Miners prevent from double spending and verify the athenticity for the security and integrity of Blockchain.
Mining allows for the generation of new coins. Miners also rewarded by newly mined coins when they solve mathematical puzzles and eligible to find any valid solution. They are rewarded whey they are succeeded in mining new blocks.
Mining serves as incentive Mechanism where miners invest computational power , electricity and mining rigs. And they can earn reward un the form of newly minted coins. This mechanism is highly important for the security of Blockchain.
Decentralized nature is also very important. Cryptocurrency mining contributes towards the Decentralized nature of Blockchain. It prevents from any single entity or authority so it also enhanced the security.
Miners are always ready to find powerful hardware solutions to improve mining capabilities. It directly leads toward technological advancement.
Name some of the challenges of cryptocurrency mining |
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- High energy Consumption is the challenge that cryptocurrency mining has to face a lot. Mining in Proof of Work (PoW) system demands high consumption. When mining is conducted on large scale high energy or electricity is required.
Cryptocurrency Mining demands specialized Graphics Cards or hardware such as ASIC miners which is very expensive. So cost of equipment and maintaince are also challenging for miners.
Intense Competition is also challenging for Miners. Because when number of miners increase so they can reduce profit of individual mining. Crytocurrency Mining faces several challenges in mining. These Challenges highlights it's dynamic nature . And also make harder to earn reward. When there are several miners to solve the complex mathematical puzzles the competition has intensified and reduces the profit.
Cryptocurrency mining operates always in regulatory landscape that vary from country to country so they have specific licensing and regulations requirements for mining operations. As my native country , Pakistan has imposed Restrictions on mining.
- Cryptocurrencie prices are volatile and it's directly impacts in mining profitability. Fluctuations coin prices effects on investement and it makes harder and complex to predict future earnings accurately.
Conclusion |
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Cryptocurrency Mining plays an important and fundamental role in the world of cryptocurrecies. It acts as a backbone for transaction validation , security and generation of new coins. Mining is totally dynamic and impactful process.
Now I would like to invite my friends @patjewell , @goodybest , @suboohi , @waterjoe , @josepha and @shahid2030 to take part in this contest. Thank you for reading my post.
My dear your post is very informative for me. After reading your post I'm able to understand about Cryptocurrency Mining. No doubt , it plus vital role. You have given extensive detail on this topic. Good luck my dear friend for your valuable post.
Thank you very my dear for your valuable comment under my post. Indeed it plays a vital role. It's good that my article is helpful for you. Thanks again for your valuable comment.
Very good post, Thanks to this post I know more deeply about how to mine😊
That's good my dear. Thank you for visiting my post.
Greetings, my friend @aaliarubab!
Your insights on cryptocurrency mining is impressive. The information you provided and your research is comprehensive & well-explained. Your use of visualls enhances the clarity of the content. I appreciate your efforts work in delivering a quality post that educates readers about the mining process and its importance. Keep up the excellent work! 👍💪🌟
Greetings !
Thank you very much my dear friend ! Yes I have tried my best to write my views about Cryptocurrency Mining. It's really good that my work is informative for you. Yes , I tried that visuals must be be able to understand the content. So I used for this freepik. Where I achieved these visuals. Ahhhh. I'm glad that you have visited my post. Thank you very much.
Steem tokens can only be mined by the top 21 witnesses and in generally many of the cryptocurrencies are not mined in this way that's why many of the people who have a good hardware and software access will be able to mine crypto tokens. Energy requirement and expensiveness of the technology like expensive computers are required to miners for mining ⛏️.
You have shared very good methods for the mining of the cryptocurrencies and proof of stake is the most common method from all of the above that you have shared with us and over all you presented your article with your every possible hard work so I wish you good luck
Yes ! I know there are 21 witnesses who are responsible for creation of new blocks and every block is produced in 3 seconds. There are 20 possible blocks within a minute. Thank you very much my dear friend for your valuable comment.
Hy @aaliarubab this me.
I don't understand mining work, but I know a little, crypto mining requires very special devices, and also requires very fantastic costs, but as we know, the results obtained are no joke, they can make us rich with various other coins that we get from mining.
GOOD LUCK FOR YOU.
STAY HEALTHY FOR YOU AND YOUR FAMILY 🥰✌️
Glad to see that you have visited my post. Yes , it required special hardwares, and high energy Consumption that is not possible here. Indeed we can be rich in a day or night just because of Cryptocurrency. Thank you very much for your kind words.
Most welcome my girl ♥️😂
Hahhaha ok
Do you know that in my quest to start mining just for the fun of it, I bought a GPU and I am still finding it difficult to understand how it works? Mining requires technicality and this is one disadvantage. Another thing that makes mining difficult is power consumption. The energy that mining rigs consume, not including the heat they emit is enough to discourage a starter from mining.
Exactly my dear friend ! Power consumption is the major issue that mining has to face. In our country our electricity and power and mining rigs don't compromise with us. That's why we pakistani mostly can't do mining. But it's good to know that you have started just for fun.
Thank you for visiting my post. Good luck dear.
Hola aaliarubab✌️
Pude leer qué en tu país tienen restricciones con las cryptomonedas y no se que tan engorroso se pueda volver tus labores dentro de este mundo. No se si puedes usar vpn o sencillamente esta baneado, me da curiosidad saber.
Creo que tienes una pequeña confusión pues los steem pueden ser minados solo que con una estrategia diferente.
En general, pienso que tienes un buen conocimiento al respecto pues explicaste todo de una forma concisa y clara.
My dear friend please that paragrph again..I said that Steem witnesses are responsible for the mining of Steem Tokens. And then I said steem can't be mined Traditionally as we do mining of Bitcoin. Hopefully it's clear to you!.
Thank you for visiting my post.
Another great post in the world of crypto.
Let's just keep on doing our best for STEEM and witness voting.
This is how we all learn! Thank you!
Good luck with the contest.
Thank you very much my dear mam !
Pleasure! 🎕
♥️
Hi @aaliarubab
You explained well about crypto mining and how it works. Your post is very helpful in understanding the whole process, what are it's benefits and what are the challenges that a miner finds in this process.
Best of luck for the contest dear.
Thank you very much for your nice comment!