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Here is my post for the lesson 4 of @besticofinder where we get a really good information, you can read that by cliking here. It seems to me a very interesting topic and from which you can learn a lot, in addition to that it can be very useful to earn money by trading. This topic was about cryptocurrency mining, and here are the questions:

How crypto currency mining works?

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Mining cryptocurrencies is not finding, discovering or manufacturing new currencies, but rather it tells the set of processes necessary to validate and process the transactions of a cryptocurrency. Not all cryptocurrencies work in the same way, since the way of mining depends on the system that the blockchain uses or the algorithm of each cryptocurrency. However, they all have something in common: miners do not perform useless operations, but rather they are necessary to maintain the stability and security of the network. Since their work is so important, the miners charge an amount of money for their mining work. It is often mistakenly believed that cryptocurrency mining consists of generating new coins. The coins are already previously defined, however, through mining it is possible to get new coins into circulation.

What is Mining Difficulty?

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As the phrase itself indicates the mining difficulty refers to the ease or not to mine bitcoins, but the important thing in this idea is that mining bitcoins is not always equally easy or equally complicated. Thanks to the difficulty, the creation and distribution of the currency is regulated, in a constant and predetermined way. In addition, it allows to produce blocks for the blockchain uniformly, making the verification process of each block possible and the network more secure. Its objectives are:

• Ensure a means for issuing currency in a decentralized manner.
• To provide the highest possible security for operations and transactions within the network.
• To shield transactions and their history in the so-called blockchain.

What are the challenges for crypto currency miners?

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• Regulatory challenges: cryptocurrencies allow a certain anonymity (although transactions are public) and this puts capital controls at risk. With the excuse (whether true or not) of terrorism, the European Union wants to control cryptocurrencies. That there are financial transactions without control is a problem and if the use of Bitcoin continues to rise, they will surely intervene. The problem is that technically there is no way to control it, so the only possible regulation is to ban it and combat its use. Do not allow businesses to accept it. Try to identify the people who use it. And a long etcetera that would prevent it from being a currency that normal people can use in practice.

• Economic challenges: are designed so that there will be no inflation. At some point there will stop being new currencies and in fact there will be deflation as some will be lost to forgotten hard drives. So an economy using Bitcoin as a currency would have to get used to prices going down, not up.This has proven to be a problem. There is a lot of upward price flexibility, but not so much downward price flexibility. Normally the labor market lowers wages with layoffs and new hires, not with salary reductions that usually bring many problems. That is why economic crises generate a lot of unemployment; downward price flexibility is very complicated. In addition, in a deflationary environment there are two other very negative effects: the delay of spending and investments (because everything will be cheaper tomorrow, it is more profitable to accumulate and wait) and debts increase over time (as wages fall). In a Bitcoin-based economy we would have to adapt to this or live in a constant economic .

• Trust challenges: For a currency to prevail in daily use there has to be trust. This trust is very complicated when volatility is very high and cryptocurrencies have had moments of much volatility, both ups and downs. How do you set a price on a currency if its relationship with the currencies in which commodity prices are set is so changeable?

Cc:-
@besticofinder
@steemitblog
@steemcurator01
@steemcurator02