What is the difference between crypto trading and crypto mining?

in crypto •  2 years ago 

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Mining is how transactions are verified. The network makes up a number called the ‘nonce’. That is number only used once. It is a REALLY big number. Like x to the 30th power big. And the miners try to guess it. They use special rigs called ASICs. That is Application Specific Integrated Circuit. It is a a computer that can only do one thing. Throw numbers. Trillions a second. And when one guesses the nonce they are awarded the privilege of appending the next block of transactions to the blockchain. This earns them them the ‘Block reward’. That is how bitcoin are created. When bitcoin started the block reward was 50 BTC. Every 4 years an event called the ‘halving’ occurs where the block reward is split in half. The first halving to the block reward down to 25 BTC. The next to 12.5 and the last down to the current 6.25. The next halving is in a couple years and it will go down to 3.125. So mining is how Bitcoins are created, from there the miner may sell some to cover mining costs. It’s very expensive. So that a brief overview of mining. Crypto trading is just trading bitcoins like you would stock or any other commodity. Those bitcoins that are being traded first had to mined to even be created. Once that is done they can be traded like any other asset.

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