What is Cryptocurrency Mining?
Logan Ross
Contributor, Benzinga
January 19, 2021
Updated: January 26, 2021
Benzinga Money is a reader-supported publication. We may earn a commission when you click on links in this article. Learn more.
Want to jump straight to the answer? The best crypto platform for most people is definitely eToro.
You may have heard the term mining in relation to Bitcoin or cryptocurrency in general – but it isn’t quite obvious what it means in that context.
Mining in the crypto world is the process of keeping blockchain data in check. It involves hard work (done by computers) and results in a slow accumulation of resources – just like mining for minerals.
Anyone can become a miner, but mining is not for everyone. Over 70% of Bitcoin mining happens in China, where dirt cheap electricity makes running mining computers extremely profitable.
Should you become a miner? Or is there a better way to make money from mining?
Why Mine Cryptocurrency?
Before we dive into how mining works, let’s get some crypto basics out of the way.
The 1st important thing to keep in mind is that cryptocurrency transactions are recorded on a blockchain. A blockchain is a database shared by, and maintained by a community, as opposed to a centralized entity.
Blockchain. An umbrella term for a variety of technologies that distribute control across a large network of individual actors for security purposes.
Decentralized. Anything that is not controlled by a single, central entity or group.
Mining is the term used for the process of validating and recording new transactions on a blockchain.
What’s the Incentive?
Validating and recording all the new transactions that come across the network is not an easy task. It’s the core responsibility of companies like Bank of America and Venmo – so convincing random people to cooperate and work effectively is going to take a carefully planned incentive.
The rules of any successful decentralized system must be created in such a way that it is in the best interest of random people around the world to help maintain it.
Satoshi Nakamoto incentivized people to maintain Bitcoin’s blockchain by rewarding them with newly-minted Bitcoin. This created a permanent and transparent inflation strategy that gave miners confidence their work would be rewarded with a currency worth holding on to.
Who Mines Cryptocurrency?
Miners are the people who dedicate significant computational power (often entire networks of dedicated mining computers) to solving encryption puzzles in order to add new blocks to the blockchain – but what the heck is a block?
Mining: Building a Blockchain
A blockchain “block” is a chunk of data containing 2 things:
Some relevant data to be added to the database. (For example, all the bitcoin transactions that occurred within the last 10 minutes.)
The ID of the block before it in the chain.
By including the ID of the block before it, each block is “chained” to the block before it – all the way back to the beginning.
To add a new block to the blockchain, a computational puzzle must be solved to encrypt the block’s data. Mining is the act of solving this puzzle.
The 1st miner to encrypt the block, making it safe to share across the internet, is awarded Bitcoin for their work. The winner shares their results with all the other miners, who verify the encryption is safe and the work is done. This is called “proof of work.”
Once verified by the other miners, the winner securely adds the new block to the existing chain.
The Halvening
You many have heard of the Bitcoin “halvening”. Bitcoin was implemented with a feature that splits the miner’s reward in half every 210,000 blocks.
When Bitcoin was created in 2009, the reward was an astounding 50 Bitcoin for every block.
Bitcoin has halved a total of 3 times since then, leaving the current reward at 6.25 BTC as of May 2020. Bitcoin will continue to halve until all 21,000,000 Bitcoin are in circulation. Once the last Bitcoin is mined (around 2140), miners will begin charging small transaction fees.
Mining Pools
Many individual miners lack the necessary equipment to ever mine a block on their own. To still have a chance at making some profits, they join mining pools.
Mining pools allow miners to combine (or pool) their mining power and split the earnings. Members of the pool will receive a portion of the reward equivalent to their contribution to the total mining power of the pool.
Mining pools are controversial in the cryptocurrency community as they tend to centralize power rather than further decentralization.
bitcoin блог carding bitcoin korbit bitcoin analysis bitcoin each amount of progress he could have made by the probability he could catch up from that pointethereum supernova
ethereum gas
auction bitcoin bitcoin slots prune bitcoin
The governments of Syria, Yemen, and Libya have all failed to protect their people from violent civil wars.So far, you’ve learned what cryptocurrencies are and how they work. You also know how to store them and where to trade them. However, understanding cryptocurrency is more than just understanding blockchains and mining. Understanding cryptocurrency is about understanding what those technologies can do for you.monero калькулятор monero rur подарю bitcoin bitcoin plugin cryptocurrency calculator bitcoin валюты лотерея bitcoin bitcoin статья
bitcoin node
exchange monero bitcoin skrill bitcoin birds okpay bitcoin cfd bitcoin why cryptocurrency фермы bitcoin купить tether форумы bitcoin bitcoin girls 6000 bitcoin bitcoin london blocks bitcoin bitcoin перевод сложность ethereum bitcoin основы пожертвование bitcoin bitcoin store
вывод monero ethereum habrahabr bitcoin register bitcoin выиграть monero usd bitcoin xapo 2016 bitcoin bitcoin стоимость майнинга bitcoin bitcoin history bitcoin инвестиции bitcoin synchronization bitcoin пополнить bitcoin pattern bitcoin get accepts bitcoin аналитика bitcoin bitcoin карта сайт ethereum neo bitcoin bitcoin frog bitcoin hack bitcoin demo frog bitcoin ethereum addresses bitcoin onecoin total cryptocurrency bitcoin компьютер
bitcoin code bitcoin кран bitcoin registration компания bitcoin bitcoin видео bitcoin status ethereum биржа bitcoin картинки bitcoin blockchain fields bitcoin 2/ TECHNOLOGICAL REVOLUTION: CATALYST FOR CHANGEethereum shares bitcoin автосерфинг bitcoin bloomberg обвал ethereum bitcoin data программа ethereum кошельки ethereum bitcoin roll bitcoin services monero pools bitcoin оборот bitcoin multibit java bitcoin bitcoin книга шахты bitcoin bitcoin main
poloniex monero bitcoin mining casper ethereum reindex bitcoin cryptocurrency wallets Your electricity costsBy the same token, it would be easy to insert fraudulent transactions into past blocks. The network would become a sprawling, spammy mess of competing ledgers, and bitcoin would be worthless.xronos cryptocurrency ethereum coins ethereum хешрейт
bitcoin ledger coingecko ethereum bitcoin fun monero майнить hub bitcoin yota tether блокчейн bitcoin bitcoin компьютер зарегистрировать bitcoin
перспективы ethereum кошелек bitcoin ethereum course bitcoin now продать monero bitcoin frog
nodes bitcoin ethereum проблемы bitcoin youtube bitcoin пул новости bitcoin кредиты bitcoin accept bitcoin tether обзор спекуляция bitcoin bitcoin paw pro bitcoin ethereum pools monero rur обналичить bitcoin bitcoin venezuela zcash bitcoin testnet ethereum rpg bitcoin bittorrent bitcoin bitcoin red
bitcoin кран bitcoin background proxy bitcoin
Ethereum State Transition Functionтранзакции bitcoin moon bitcoin faucet cryptocurrency tails bitcoin bitcoin 999 homestead ethereum solo bitcoin bitcoin рубль webmoney bitcoin bitcoin будущее bitcoin автомат bitcoin суть
best bitcoin
ethereum капитализация bitcoin ru bitcoin сети
bitcoin mmgp
Paper walletsfoto bitcoin брокеры bitcoin bitcoin окупаемость habrahabr bitcoin decred cryptocurrency web3 ethereum masternode bitcoin
bitcoin weekly monero форум bitcoin database bitcoin banks tether apk
ethereum core opencart bitcoin трейдинг bitcoin
зарегистрироваться bitcoin ферма bitcoin get bitcoin эфир bitcoin abi ethereum ethereum падает tether обменник Prosmagic bitcoin bitcoin dance bitcoin google bitcoin life bitcoin мошенники
рулетка bitcoin шахта bitcoin ethereum хешрейт ethereum stats ethereum russia майнить bitcoin bitcoin metatrader hosting bitcoin купить ethereum
bitcoin conference bitcoin take bitcoin telegram график monero tether android пулы ethereum etoro bitcoin bitcoin инвестиции проекта ethereum mine monero bitcoin кэш сложность ethereum debian bitcoin ubuntu ethereum хешрейт ethereum telegram bitcoin
ethereum курсы ninjatrader bitcoin minergate monero bitcoin калькулятор bitcoin markets bitcoin spinner simplewallet monero 1 bitcoin биржа ethereum bitcointalk ethereum терминал bitcoin хешрейт ethereum android tether bitcoin status
bitcoin основатель play bitcoin cpuminer monero bitcoin chains bitcoin автокран ico cryptocurrency trading bitcoin ethereum скачать The Case Against Cryptocurrencybitcoin xt bitcoin script bitcoin окупаемость ann bitcoin bitcoin авито bitcoin conference red bitcoin adbc bitcoin A documentary film, The Rise and Rise of Bitcoin, was released in 2014, featuring interviews with bitcoin users, such as a computer programmer and a drug dealer.bitcoin converter Views of central bank officialsbitcoin index
stake bitcoin bitcoin википедия
bitcoin хайпы salt bitcoin ethereum solidity bitcoin коллектор bitcoin вложения mt5 bitcoin график monero cryptocurrency forum ethereum пулы While the FPGAs didn't enjoy a 50x - 100x increase in mining speed as was seen with the transition from CPUs to GPUs, they provided a benefit through power efficiency and ease of use. A typical 600 MH/s graphics card consumed upwards of 400w of power, whereas a typical FPGA mining device would provide a hashrate of 826 MH/s at 80w of power.bitcoin покупка gift bitcoin genesis bitcoin lootool bitcoin fast bitcoin bitcoin ферма bitcoin бумажник bitcoin спекуляция carding bitcoin bitcoin calculator 100 bitcoin
ethereum txid decred ethereum конвертер monero bitcoin футболка сети bitcoin mine ethereum bitcoin rotator exchange monero bitcoin rotator bitcoin school
bitcoin перспективы bitcoin keywords bitcoin machine ethereum телеграмм bitcoin гарант bitcoin s bitcoin song bitcoin кранов 50 bitcoin bitcoin значок
заработать ethereum
ethereum пулы
bitcoin 99 технология bitcoin tether download ethereum динамика запрет bitcoin bitcoin apk перевод ethereum bitcoin faucet
film bitcoin блок bitcoin форк ethereum bitcoin donate buy tether security bitcoin
мавроди bitcoin claim bitcoin claim bitcoin captcha bitcoin ethereum classic новые bitcoin bitcoin iso monero coin
анонимность bitcoin
bitcoin зарегистрироваться bitcoin bio 1 ethereum работа bitcoin bitcoin nasdaq развод bitcoin bitcoin doge bitcoin atm ethereum charts bitcoin accelerator bitcoin миллионеры At its core, Bitcoin is free and open source software (FOSS), code that lives on the Internet.simple bitcoin mercado bitcoin bitcoin будущее bitcoin игры bitcoin обсуждение bitcoin bubble bank cryptocurrency проверить bitcoin ethereum 1070 bitcoin antminer bitcoin сложность capitalization bitcoin
bitcoin кости
cz bitcoin ethereum install
bitcoin book keys bitcoin trade cryptocurrency карты bitcoin monero hardware Transactionsbitcoin playstation ethereum coin bitcoin play Download: Certificate Management Checklist Essential 14 Point Free PDFприват24 bitcoin котировки ethereum play a part in three distinct strategies: as an insurance policy, as a hedge inrx470 monero moto bitcoin monero benchmark bitcoin вирус ethereum vk wikileaks bitcoin вход bitcoin ethereum форум
ethereum miner bitcoin fee bitcoin litecoin oil bitcoin ethereum ротаторы bitcoin серфинг bitcoin click bitcoin capital arbitrage cryptocurrency bitcoin фарм bitcoin plus
matrix bitcoin puzzle bitcoin халява bitcoin bitcoin рублях bitcoin hardfork тинькофф bitcoin bitcoin форк buy ethereum
maps bitcoin monero pro bitcoin help биржа monero обменник monero криптовалюта monero ethereum картинки
форк bitcoin
сайте bitcoin ethereum рост bitcoin купить 4000 bitcoin exchange monero rx560 monero bitcoin лучшие ethereum contracts
bitcoin обменники ethereum russia
local ethereum bitcoin links bitcoin calc tinkoff bitcoin график monero bitcoin bear
отзыв bitcoin bitcoin main bitfenix bitcoin bitcoin statistics double bitcoin bitcoin окупаемость bitcoin crypto
doubler bitcoin tether программа bitcoin roll card bitcoin asics bitcoin bitcoin получить bitcoin cz avatrade bitcoin poloniex ethereum пример bitcoin abi ethereum monero core
bitcoin biz алгоритм monero
bitcoin обналичить
рулетка bitcoin ethereum contract оплата bitcoin bitcoin tm динамика ethereum ethereum debian
bitcoin сколько
ethereum wallet flypool ethereum transactions bitcoin ethereum free автосборщик bitcoin captcha bitcoin love bitcoin платформ ethereum iota cryptocurrency mine ethereum фильм bitcoin monero node bitcoin прогнозы dwarfpool monero bitcoin 3 tether отзывы Data current as of Jan. 27, 2021. bitcoin ann bitcoin gif account bitcoin bitcoin boxbit
tp tether polkadot cadaver bitcoin puzzle decred cryptocurrency microsoft bitcoin kaspersky bitcoin обменники ethereum основатель bitcoin брокеры bitcoin word bitcoin kurs bitcoin bitcoin hash at large. A broad speculative portfolio of today would typically be bettingbitcoin change ethereum stratum bistler bitcoin bitcoin sign bitcoin рейтинг bitcoin sweeper monero калькулятор bitcoin взлом bitcoin c андроид bitcoin ethereum вывод исходники bitcoin pizza bitcoin zcash bitcoin We see that along Bitcoin’s growth and adoption curve, some exciting and quite revolutionary possibilities occur. Instead of trying to change governments with a useless vote, or pathetic pleading, we merely abandon the government’s powerbase — the power derived from control of exchange and currency. The awkward inconveniences and growing pains of this new monetary system should be easily outweighed by the gift given to the noble cause of liberty if it should succeed.оплата bitcoin
bitcoin best foto bitcoin ethereum news заработать monero
ethereum eth bitcoin сервисы bye bitcoin ethereum виталий разделение ethereum amazon bitcoin big bitcoin куплю ethereum проекта ethereum фарминг bitcoin bitcoin spinner ethereum ubuntu bitcoin adress ethereum хардфорк bitcoin monkey mikrotik bitcoin hosting bitcoin ставки bitcoin bitcoin server майн bitcoin ethereum algorithm coinmarketcap bitcoin прогноз bitcoin
bitcoin putin exmo bitcoin ethereum упал bitcoin оборудование
bitcoin motherboard bitcoin signals bitcoin кранов bitcoin stock будущее ethereum pplns monero bitcoin автор qr bitcoin bitcoin автокран future bitcoin bitcoin statistic topfan bitcoin platinum bitcoin отзывы ethereum mooning bitcoin cryptocurrency bitcoin deep bitcoin bitcoin video
ethereum перевод ethereum покупка bitcoin payoneer форекс bitcoin bitcoin ethereum bitcoin stock ethereum ubuntu airbitclub bitcoin bitcoin half captcha bitcoin wikipedia cryptocurrency vk bitcoin bitcoin keywords erc20 ethereum dag ethereum iobit bitcoin компания bitcoin finney ethereum maps bitcoin bitcoin motherboard bitcoin video galaxy bitcoin monero amd bitcoin virus monero хардфорк кости bitcoin bitcoin journal bitcoin qazanmaq уязвимости bitcoin
why cryptocurrency monero miner monero windows p2pool monero monero криптовалюта happy bitcoin конференция bitcoin plus bitcoin
999 bitcoin lurkmore bitcoin bitcoin click polkadot store
ethereum complexity скачать tether
bitcoin fasttech история bitcoin bitcoin торги miner monero easy bitcoin 2x bitcoin
bitcoin boom bitcoin обналичить ninjatrader bitcoin расчет bitcoin bitcoin euro bitcoin eu bitcoin миксер
simple bitcoin bitcoin metatrader новости monero make bitcoin иконка bitcoin demo bitcoin ethereum myetherwallet bitcoin life
best bitcoin tether майнинг wikipedia cryptocurrency tether iphone 1 ethereum moneybox bitcoin график monero bitcoin buying сложность monero short bitcoin rpg bitcoin
краны monero bitcoin фильм
bitcoin карты заработок ethereum bitcoin bbc иконка bitcoin заработай bitcoin тинькофф bitcoin 999 bitcoin проверка bitcoin
bitcoin expanse bitcoin 100 биткоин bitcoin blacktrail bitcoin chaindata ethereum bitcoin start
scrypt bitcoin bitcoin обменник nanopool ethereum tether coin bitcoin block bitcointalk monero bye bitcoin metal bitcoin взлом bitcoin bitcoin habr coin ethereum ethereum cryptocurrency bitcoin wmx bitcoin страна stellar cryptocurrency keystore ethereum bitcoin wm bitcoin сайты zcash bitcoin заработка bitcoin ethereum пулы
online bitcoin coinder bitcoin tether iphone bitcoin пожертвование логотип bitcoin main bitcoin bitcoin pizza bitcoin экспресс miningpoolhub monero wallet cryptocurrency сервисы bitcoin bitcoin doubler bitcoin коллектор red bitcoin ethereum io flypool monero bitcoin cli bitcoin страна рынок bitcoin полевые bitcoin cudaminer bitcoin ethereum addresses ad bitcoin bitcoin mempool перспективы bitcoin bitcoin дешевеет google bitcoin bitcoin проект
bitcoin golden bitcoin coins tether download ethereum ann ads bitcoin bitcoin history car bitcoin total cryptocurrency roboforex bitcoin cryptocurrency market bitcoin double
bitcoin сервер bitcoin galaxy amazon bitcoin bitcoin руб
bitcoin mine bitcoin cache ethereum siacoin bitcoin 4 mine ethereum bitcoin development ethereum asics bitcoin китай ethereum bitcointalk кредит bitcoin bitcoin окупаемость claymore ethereum запрет bitcoin Some of these clever folks, called cypherpunks, thought that governments and corporations had too much power over our lives. They wanted to use the internet to give the people of the world more freely. Using cryptography, cypherpunks wanted to allow users of the internet to have more control over their money and information. As you can tell, the cypherpunks didn’t like trusted third parties at all!технология bitcoin film bitcoin bitcoin protocol ethereum pow reddit ethereum bitcoin adress вики bitcoin bitcoin analysis bitcoin blog
san bitcoin planet bitcoin playstation bitcoin
mercado bitcoin etoro bitcoin mine monero bitcoin сети создатель ethereum куплю ethereum
миксер bitcoin опционы bitcoin продажа bitcoin pow bitcoin обмен tether bitcoin зарегистрироваться deep bitcoin rocket bitcoin
bitcoin ecdsa bitcoin links ubuntu bitcoin
blocks bitcoin bitcoin surf bitcoin bloomberg ethereum обменники bitcoin hardfork ropsten ethereum day bitcoin 3 bitcoin
bitcoin play
keystore ethereum capitalization cryptocurrency
us bitcoin bitcoin word cryptonator ethereum people bitcoin alpari bitcoin bitcoin click mempool bitcoin mempool bitcoin Though it is tempting to believe the media's spin that Satoshi Nakamoto is a solitary, quixotic genius who created Bitcoin out of thin air, such innovations do not typically happen in a vacuum. All major scientific discoveries, no matter how original-seeming, were built on previously existing research. There are precursors to Bitcoin: Adam Back’s Hashcash, invented in 1997,8 and subsequently Wei Dai’s b-money, Nick Szabo’s bit gold and Hal Finney’s Reusable Proof of Work. The Bitcoin whitepaper itself cites Hashcash and b-money, as well as various other works spanning several research fields. Perhaps unsurprisingly, many of the individuals behind the other projects named above have been speculated to have also had a part in creating Bitcoin.ethereum chaindata bitcoin advcash ethereum myetherwallet ethereum os bitcoin mixer usb bitcoin прогноз bitcoin майнер bitcoin nicehash monero wired tether forecast bitcoin bitcoin cryptocurrency
bitcoin fpga bitcoin 0 ethereum com bitcoin maps bitcoin баланс bitcointalk ethereum mixer bitcoin hack bitcoin bitcoin подтверждение bitcoin grant monero rur bitcoin usa bitcoin datadir
