What Is Mining?
What Is Mining?
Cryptocurrency is gaining in popularity with each day. Whether it is its extreme volatility or promise of high returns, people are curious and drawn towards them. These virtual coins are sort of a breather to those who feared losing money in the market at the beginning of the coronavirus pandemic, and an enigma to new investors. Usually, when people talk about cryptocurrency, they invariably refer to Bitcoin, the largest and oldest of them all. People can get Bitcoin primarily in two ways: either by directly investing through online exchanges or by mining using sophisticated computer rigs. Investing in cryptocurrency is somewhat similar to trading in stocks.
What Is Mining?
It is a process of creating new crypto coins by solving complex mathematical equations. When a person invests in a cryptocurrency, the details of the investment are entered on a distributed ledger, called the blockchain. But the process is complete only when a “miner” verifies the transaction as legitimate. Once that is done, the transaction is locked into the blockchain for everyone to see and the transaction is complete.
This verification process requires miners to solve complex equations. They are in a race against each other to solve the problem. Those who do that first are paid a fraction of the transaction as a fee for their effort. Every successful transaction leads to new coins entering into circulation.