Blockchain technology 3. – Mining

Mining is the process of validating new cryptocurrency transactions and then adding them to the blockchain. Moreover, this is the way new coins are minted. This article aims to clarify the process of mining; describe this system’s mechanics, structure, etc. What is Cryptocurrency Mining? Mining consists of competitive mathematical problem-solving, the fulfillment of which allows one to put a new block into a blockchain. Highly efficient computers do these calculations, and specific operators compete to win the puzzle first.

A winner who solves the problem and affixes the block to the blockchain is rewarded with new cryptocurrency and valuable processing fees. Proof of Work As for the aforementioned competitive system, Proof of Work is the most popular way to achieve it. It demands that miners, as operators of the blockchain quest, do computational work to demarcate a new block. However, these computations consume a vast amount of resource. This fact makes this approach very secure but also wasteful in terms of consumption. As such, Bitcoin and Ethereum used to (i.e., until Ethereum 2.0) adhere to this philosophy.

Mining Hardware Considering the described competition: CPUs – central processing units. While initially, most of the mining was performed using them, they offer poor performance as of now. GPUs – graphics processing units. GPUs are more powerful than CPUs. However, they are less efficient when it comes to mining; however, they are still being utilized. Global Processing Pools – groups of computer miners who link their computational energy over a network. Such pools require fewer proportional efforts as compared to solo mining.

ASICs – application-specific integrated circuits. These are specialized pieces of machinery created to do only one thing: mine. They consist of maximum technological efficiency but also cost more wealth. Environmental Impact and Possible Alternative.posuae given the analytical material above, mining, especially PoW, is notorious for its environmental footprint and high energy demands. The Proof of Stake concept is intended to address this issue by supporting safer processes.

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