Hey Guyss..!!!
Meet again with me Wahyu Nahrul.
This is my 2nd article on Steemit Crypto Academy in this 4th week, this time I want to make homework given by our professor @besticofinder, which the homework is to explain some questions related to cryptocurrency mining.
Btw, if you haven't read our professor's post @besticofinder, please read here 👉 (Introduction to Cryptocurrency Mining | Steemit Crypto Academy | Lesson 4) which is very informative and can add to our insight about cryptocurrency mining. The questions that become our homework are as follows:
- How Cryptocurrency Mining Works?
- What is Mining Difficulty?
- What Are The Challenges For Cryptocurrency Miners?
To answer these questions, I will take an example of a coin that can be mined it's called Ethereum. Why did I take Ethereum and not Bitcoin? the answer is because there is many of our friends have taken Bitcoin as an example of Cryptocurrency mining in this class, then I will explain it with other coins so that all readers can get new knowledge from my writing.
You guys don't need to worry, because the mining process for Ethereum and Bitcoin is almost the same, so everything I explain is interrelated. Okay, let's get right to the first question.
How Cryptocurrency Mining Works?
How do I mine Cryptocurrency? especially Ethereum.
That is the question that first implies in our minds.
Ethereum is a network that has its own blockchain system and is separate from Bitcoin. All transactions made using ethereum must be approved by eth miners or Ethereum mining experts.
The transaction must be verified and entered into the Ethereum blockchain. This verification process is known as proof of work. It is your job as a miner to make sure no one is cheating. To ensure that all Ethereum transactions are valid eth miners have to solve various complex mathematical problems. By using advanced computer languages.
All the other miners check if the number is correct and if 51% of them agree that the number is correct then a new block will be added to the blockchain. The new block holds all transactions that are now verified and the miner who finds them will be rewarded!
Then the miners started working on solving new mathematical problems to verify transactions from other blocks.
There are several ways to mine Ethereum, some are free and some are paid, the methods of mining I mean are:
- Pool mining
- Mining independently
- Using cloud mining services
1. Pool Mining
Free and paid Ethereum mining in a pool is the easiest and fastest way to get started. You will cooperate with other people.
Everyone mining Ethereum with a single pool agrees that if one of them finds a secret number, they will share it with everyone.
How often do you find blocks and distribute the prizes according to the size of the pool. However, not all pools are the same. These are the things you should consider before joining a pool.
2. Mining Independently
The second is independent mining using your own computer. Trying to mine Ethereum yourself does sound like a great idea. You will not share gifts with anyone. You just have to turn on your computer and just let the money flow in, right?
That is wrong. When you mine yourself, you will compete with other people and will only get prizes if you solve the math puzzle first.
Because you are competing with a large network of eth miners and companies with more resources, your chances of success will be slim. Mining independently will only be profitable if you have a lot of resources at your disposal, what I mean here are 100+ graphics cards.
3. Cloud Mining
Cloud mining is a safe way for mining service providers to ensure that profits go to themselves from the equipment they have purchased. The fluctuation of cryptocurrency prices does not affect them because they are paid in advance.
So, when you buy cloud mining services, you will have no problem building a special rig and making your own Etherium Faucret. In an ideal situation, cloud mining is more detrimental than independent mining. Instead of using cloud mining services, you are better off buying Ethereum right away.
Personal opinion: For now, try to stay away from cloud mining services. If you want to invest in cloud mining services, just use the money to buy the cryptocurrency you want from the well-known Etherium faucet.
Because Ethereum is a cryptocurrency whose value fluctuates. You will get the prize directly and if the price starts to drop, you will be able to sell it right away to minimize losses.
What is Mining Difficulty?
In order to mine Ethereum, miners have to set up an Ethereum wallet to store all the currencies that the miners find. This is done because so many hackers now have managed to steal the mining results of miners, and this should really be paid attention to by miners.
Then the equipment that must be prepared is a computer that has the following specifications:
- Graphics card (GPU) at least 3 GB RAM;
- Compatible operating system (Windows 10 64bit).
- etc
In addition, miners also have to install mining applications and address mining pools if you are going to mine Ethereum with a pool.
What Are The Challenges For Cryptocurrency Miners?
There are several things that become obstacles for cryptocurrency miners, including:
1. Heating problem
If your equipment gets very hot, it can break. Once your equipment breaks, it's usually not worth repairing it. You better spend your money replacing your Ethereum mining rig and fixing the cause of the heating problem.
2. Noisy sound
Any fan running to cool your appliance will make a lot of noise and will be very loud and fast. Usually, you will need something like a garage/warehouse or a location away from the settlement to do everything.
3. Electricity cost
Having a lot of equipment that uses electricity will also make your electricity costs swell. For example, with only ten graphics cards you will spend around 3-4 dollars on electricity each day. Imagine if you used 100 graphics cards to be more competitive. The cost of electricity to power all the cards will go up to 30-40 dollars per day for just one day.
4. Space
Having a place to store more than 100 Ethereum mining rigs is not something most people have access to.
Last word
That is my answer to some of the questions given by our professors, I hope readers like my writing and take some new knowledge about crypto mining.
Thank you for reading my blog, I hope it is useful for all of you. 😁
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