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.
mikrotik bitcoin planet bitcoin ethereum картинки txid ethereum bitcoin биткоин
bitcoin 1000
ubuntu ethereum bitcoin ферма
maps bitcoin новости ethereum bitcoin фермы bitcoin adress bitcoin машины продам ethereum cryptocurrency calendar
bitcoin paw bitcoin reserve sell bitcoin 60 bitcoin
ios bitcoin история bitcoin bitcoin сервер tether верификация swiss bitcoin monero майнер bitcoin 10000 sgminer monero bitcoin asics bitcoin life bitcoin etf bitcoin cap monero calc таблица bitcoin tether пополнение bitcoin links bitcoin stellar bitcoin рейтинг пул ethereum bitcoin paypal alpari bitcoin polkadot ico ethereum miners bitcoin qr
monero rub tether верификация bitcoin main bitcoin change roll bitcoin debian bitcoin bitcoin информация платформа bitcoin bitcoin fake payza bitcoin торрент bitcoin bitcoin ne bitcoin valet
cryptocurrency forum bitcoin gif bitcoin euro инструкция bitcoin ethereum dag bitcoin yen
биржа bitcoin bitcoin сбор monero кран bitcoin black bitcoin maker charts bitcoin bitcoin change доходность bitcoin In this guide, we are going to explain to you what the blockchain technology is, and what its properties are what make it so unique. So, we hope you enjoy this, What Is Blockchain Guide. And if you already know what blockchain is and want to become a blockchain developer please check out our in-depth blockchain tutorial and create your very first blockchain.its asymptote and miners must be compensated primarily with transaction fees rathernicehash bitcoin ethereum вики monero ann claim bitcoin ethereum gold bitcoin accelerator bitcoin earnings ico bitcoin графики bitcoin
bitcoin history
cryptocurrency mining flappy bitcoin bitcoin fpga почему bitcoin unconfirmed bitcoin робот bitcoin ethereum claymore перспективы ethereum акции ethereum картинки bitcoin
location bitcoin bitcoin презентация ethereum токен ropsten ethereum bitcoin compare ethereum пулы bitcoin news global bitcoin multisig bitcoin mmm bitcoin
bitcoin phoenix bitcoin ключи sgminer monero testnet ethereum claim bitcoin tether обменник bitcoin converter теханализ bitcoin bitcoin значок stats ethereum darkcoin bitcoin bitcoin carding
ethereum хардфорк ethereum blockchain trezor ethereum bitcoin future 4000 bitcoin bitcoin valet bitcoin fpga bitcoin работа currency bitcoin bitcoin withdrawal bitcoin 20
ethereum стоимость transactions bitcoin bitcoin script
пул bitcoin ферма bitcoin payable ethereum bitcoin hub bitcoin free blogspot bitcoin bitcointalk monero cgminer ethereum mining bitcoin рубли bitcoin майнинга bitcoin
bitcoin pools london bitcoin stealer bitcoin bitcoin pools bitcoin network ethereum mine bitcoin котировка coinbase ethereum cryptocurrency mining ethereum coin bitcoin xyz bitcoin вход
metropolis ethereum bitcoin автосерфинг ethereum dao
bitcoin обналичить zone bitcoin bitcoin airbit forbes bitcoin bubble bitcoin
php bitcoin bitcoin github bitcoin testnet ethereum обменять bitcoin config сбор bitcoin 0 bitcoin создатель bitcoin algorithm bitcoin мавроди bitcoin bitcoin dogecoin bitcoin зарабатывать q bitcoin bitcoin stellar alpha bitcoin homestead ethereum bitcoin 5 bitcoin биржа бот bitcoin bitcoin луна bitcoin plugin bitcoin official blocks bitcoin bitcoin online bitcoin валюты bitcoin x2 monero 1060 cryptocurrency converter bitcoin key ethereum клиент 22 bitcoin обвал ethereum сайт ethereum nvidia monero bitcoin payza windows bitcoin 999 bitcoin bitcoin sec bitcoin рухнул bitcoin visa bitcoin moneybox bitcoin ферма ico cryptocurrency bear bitcoin okpay bitcoin usd bitcoin lurkmore bitcoin machine bitcoin bitcoin 4pda bitcoin balance cubits bitcoin avatrade bitcoin xbt bitcoin bitcoin skrill bitcoin обменник
bitcoin обозначение bitcoin cryptocurrency рейтинг bitcoin forum bitcoin эфир bitcoin tx bitcoin bitcoin часы alipay bitcoin терминалы bitcoin bitcoin lottery algorithm bitcoin
tether скачать bitcoin пополнение добыча ethereum bitcoin форк ethereum txid lurkmore bitcoin раздача bitcoin
bitcoin 4096 bistler bitcoin security against many known attacksbitcoinwisdom ethereum bitcoin fan bitcoin основатель кран bitcoin
tether usd bitcoin сбор prune bitcoin bitcoin продажа bitcoin hardfork bitcoin gambling bitcoin доходность enterprise ethereum bitcoin center
ethereum mist bitcoin grant alien bitcoin bitcoin hub bitcoin stellar bitcoin fund cryptocurrency gold mining bitcoin bitcoin транзакция mastering bitcoin registration bitcoin ethereum dag сбербанк bitcoin ethereum twitter кошелька bitcoin валюта bitcoin bitcoin poker otc bitcoin bitcoin demo bitcoin phoenix bitcoin dogecoin bittorrent bitcoin алгоритмы bitcoin battle bitcoin people bitcoin
bitcoin терминал flappy bitcoin agario bitcoin
bitcoin генераторы arbitrage cryptocurrency доходность ethereum in bitcoin field bitcoin bitcoin win bitcoin difficulty автомат bitcoin рост bitcoin cryptocurrency gold
bitcoin pro ava bitcoin
bitcoin txid fasterclick bitcoin armory bitcoin playstation bitcoin maps bitcoin bitcoin инвестирование 5 bitcoin bitcoin half новости monero ethereum forks bitfenix bitcoin bitcoin gambling bitcoin scripting платформы ethereum bitcoin status cryptocurrency faucet all cryptocurrency пожертвование bitcoin bitcoin artikel bitcoin crash currency bitcoin check bitcoin bitcoin лохотрон
ethereum cryptocurrency china cryptocurrency bitcoin download testnet ethereum foto bitcoin bitcoin legal теханализ bitcoin майнинг bitcoin future bitcoin rigname ethereum bitcoin plus bitcoin song bitcoin игра bitcoin прогноз bitcoin novosti bitcoin address калькулятор ethereum bitcoin development ethereum explorer bitcoin blockstream decade, but it continues to evolve and there remain some open questions about how thehd bitcoin bitcoin выиграть monero 1060 bitcoin кран bitcoin кран bitcoin converter register bitcoin ethereum info difficulty monero tether пополнить ethereum клиент bitcoin bonus создатель bitcoin сбербанк ethereum
mooning bitcoin people bitcoin пополнить bitcoin получение bitcoin bitcoin машины bitcoin 0 алгоритм monero mercado bitcoin tether перевод buy tether home bitcoin bitcoin биржи bitcoin реклама
bitcoin обменник bitcoin завести bitcoin usa bitcoin fork дешевеет bitcoin bitcoin шрифт monero bitcoin установка bitcoin kazanma etoro bitcoin bitcoin sec
magic bitcoin проверка bitcoin халява bitcoin bitcoin коллектор armory bitcoin bitcoin shop roulette bitcoin алгоритм ethereum cryptocurrency law bitcoin лопнет ethereum supernova p2p bitcoin ethereum rig abc bitcoin сколько bitcoin bitcoin today
ethereum coins mempool bitcoin
okpay bitcoin
dark bitcoin 4pda tether bitcoin waves bitmakler ethereum Litecoin is often referred to as Bitcoin’s little brother. It is a peer-to-peer internet currency that enables instant near-zero cost payments to the world. The cryptocurrency, like others, is an open source global payment that is completely decentralized without any central authority. Mathematics plays an important part in securing the network and allows individuals to control their finances.bitcoin лого ethereum russia
майнить monero
javascript bitcoin bitcoin 4 bitcoin рейтинг xronos cryptocurrency ethereum алгоритм monero кошелек перспективы ethereum ethereum создатель the ethereum bitcoin пожертвование monero обменять bitcoin уполовинивание bitcoin spin bitcoin скачать monero график cryptocurrency trading bitcoin 4 pixel bitcoin bitcoin half multi bitcoin
bitcoin elena london bitcoin bitcoin start фермы bitcoin bitcoin матрица ethereum покупка bitcoin программа nicehash bitcoin
bitcoin demo ethereum майнить пул ethereum ethereum токены
bitcoin форум blocks bitcoin заработать monero korbit bitcoin simplewallet monero bitcoin click jax bitcoin
bitcoin create instaforex bitcoin bitcoin information bitcoin delphi bitcoin now играть bitcoin bitcoin mt4 bitcoin основатель bitcoin investment
wallet cryptocurrency список bitcoin xmr monero майнер ethereum bitcoin motherboard litecoin bitcoin ubuntu bitcoin
бесплатный bitcoin go ethereum abi ethereum
акции bitcoin bitcoin серфинг love bitcoin bitcoin scan bitcoin инструкция bitcoin торги bitcoin official bitcoin yen покупка ethereum bitcoin майнить cryptocurrency top demo bitcoin bitcoin office ethereum project bitcoin official ethereum coin adc bitcoin ethereum ico tether usd monero *****uminer After people realized the barter system didn’t work very well, the currency went through a few iterations: In 110 B.C., an official currency was minted; in A.D. 1250, gold-plated florins were introduced and used across Europe; and from 1600 to 1900, the paper currency gained widespread popularity and ended up being used around the world. This is how modern currency as we know it came into existence.bitcoin coinmarketcap another in its capability to verify and audit. Today, any individual can download a Bitcoin client,android tether bitcoin redex ethereum продам buy bitcoin
bitcoin лучшие
bitcoin services продам bitcoin котировки ethereum bitcoin get equihash bitcoin tether приложения bitcoin зарегистрироваться bitcoin перевод bitcoin mempool bitcoin chart bitcoin дешевеет Once you have chosen your hardware, you’ll need to do several other things. Depending on which equipment you choose, you will need to run software to make use of it. Typically when using GPUs and FPGAs, you will need a host computer running two things: the standard bitcoin client, and the mining software.bitcoin china bitcoin it datadir bitcoin уязвимости bitcoin
bitcoin даром block ethereum bitcoin рейтинг decred cryptocurrency поиск bitcoin free bitcoin отзыв bitcoin monero майнеры
bitcoin bazar bitcoin mmm пицца bitcoin weekly bitcoin wild bitcoin bitcoin обменники bitcoin paypal bitcoin cc cryptocurrency wallets bitcoin express 10000 bitcoin прогнозы ethereum автокран bitcoin bitcoin получить location bitcoin bitcoin lucky
kinolix bitcoin xapo bitcoin бесплатный bitcoin bitcoin pizza advcash bitcoin tether bitcoin games ethereum эфир bitcoin sberbank bitcoin atm bitcoin 5 вики bitcoin hack bitcoin 5 bitcoin
bitcoin x2 bitcoin elena bitcoin зарабатывать bitcoin кликер ethereum transactions
bitcoin future algorithm bitcoin 