There are two ways to acquire cryptocurrencies: buying them and mining them. Mining is how most cryptocurrencies are created, therefore, this activity is often known as “mining crypto-gold”. If you are looking to mine crypto instead of purchasing it, you will have to make many calculations to ensure that your endeavor is fruitful. There are many different options available to mine cryptocurrencies to your account.
Since the mining process is very demanding from a power perspective, you will have to be wary of the price of electricity. This is one of the main considerations miners have to make, and the reason why the largest mining companies are located in areas of the world where energy is inexpensive. Afterwards, you need to think over the purchase of the hardware–mining device and its configuration. This decision depends on what cryptocurrency you decide to mine. It is also necessary to choose suitable software to administrate the hardware. All of these topics deserve more than an entire blog post by themselves, so let’s
How crypto currency mining works
Bitcoin, Litecoin, Dogecoin, and other cryptocurrencies are created by mining. Mining entails a calculation of a mathematical problem. The miner who finds the solution to this problem first receives a certain amount of coins of a given cryptocurrency. This process also serves another purpose: it verifies and checks the transactions made in the blockchain (transfers of assets from one account to another).
The miner (or their crypto mining software) selects a certain number of pending payment transactions in a block. The primary criterion for including or not including a deal in a block is the fee that users offered when entering the trade. The transaction fees are the ones that the miners selected beforehand.
The mathematical task is usually to find a value that depends on hashing functions. This validates grouped payment transactions, and there is a current time limit. Due to the hash function, the possibility of finding the right solution is random, so who finds it first depends on the performance of the hardware seeking the solution, not on the mathematical abilities of the miner. The current limit changes every few minutes. This limit comes from the average time that blocks in the network have taken to solve during this period. This means that the chance of finding a solution is inversely proportional to the current network performance.
You can learn more about crypto mining here.