Crypto Academy week 4 Homework Post for @besticofinder by @aumbamumang - Introduction to Cryptocurrency Mining

Hello friends, This time I'll do the homework given by @besticofinder in the 4th week of this crypto academic lesson. The content of this task is to clarify some of the questions surrounding cryptocurrency mining. The questions are as follows:

1. How does cryptocurrency mining work?
2. What is Mining Difficulty?
3. What are the challenges for cryptocurrency miners?

1. How does cryptocurrency mining work?

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What a miner has to do is solve a mathematical equation that makes it possible to verify the unconfirmed blocks on the blockchain and then verify them once they are sure that the transaction is genuine. To be able to complete these blocks, they have to prepare a computer with certain specifications that will work to solve the algorithms that have been provided in these blocks.

At times like now, there are many miners who do mining work and therefore they compete with each other about who finishes the work first, and whoever completes it first receives a reward from mining Cryptocurrency.

2. What is Mining Difficulty?

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Actually, it is not difficult to do mining in cryptocurrency. However, there are things that must be considered first, namely, we have to spend quite a lot of capital at the initial stage, because we have to buy some equipment that is quite expensive.

Another mining difficulty is the difficulty in the time it takes a miner or group of miners to find the correct hash for each block they validate. Because many miners are fighting over each other in mining crypto.

3. What are the challenges for cryptocurrency miners?

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In a time like today, a lot of miners are doing mining work and therefore they are competing with each other about who finishes the work first and who finishes it first will receive rewards from Cryptocurrency mining.

You can see the need for competition. So, the first person to solve the puzzle will announce to another miner or node that he has solved the puzzle, the other miners will then be disappointed that they will not receive any reward for their futile efforts. Then the person who verifies the block becomes the person who confirms and gets the reward.

The more well-known the coins you want to mine, the more computers competing on the peer-to-peer network will increase. And it gets harder and harder when miners compete with each other for a limited number of rewards from their hashing.

Conclusion

In the process of mining crypto, we can calculate in advance whether we will get a profit or even a deficit because the costs we spend in mining cryptocurrency are not small and with increasingly fierce competition we will find it increasingly difficult to get rewards from the cryptocurrency mining process.

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