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Mining

Mining

This is the process of earning cryptocurrency by providing the power of your computer equipment.

In mining, your computer hardware is involved in creating, validating, or chaining blocks on a specific blockchain network (Bitcoin, Ethereum, etc.). Thus, your computer participates in the full service of the crypto project and receives a reward for this - digital coins or tokens.

  • Miners, using the power of their hardware, take new transactions and pack them into blocks and thereby try to add a new block to the chain
  • When the task is solved, a new block is added to the chain, data about it is sent to all participants. All participants in the system check whether the problem is solved correctly, and if so, a new bitcoin is minted and it is received by the miner who first solved the problem.
  • The difficulty of the task is constantly calibrated by the blockchain algorithm - in order to mathematically limit the number of issued bitcoins.
Types of mining
CPU

Using one or more processors to solve mathematical problems is the easiest way to mine. Initially, it was the most popular way to mine Bitcoin, but then it lost in terms of GPU and ASIC power, becoming inefficient. Now multi-core processors can be used to mine young altcoins, where a lot of power is not required.

GPU

The use of discrete graphics cards has become a more efficient replacement for the CPU. Their efficiency is many times greater than the standard power of processors. Due to the great popularity of mining, a massive purchase of video cards began all over the world, which led to their shortage. However, according to some experts, the cost of video cards will fall in the near future.

FPGA

The GPU has been replaced by FPGA (Field Programmable Gate Array). He suggests using a video card with the ability to reprogram for a more profitable mining algorithm. The low power consumption and improved performance compared to the GPU have given impetus to the development of the FPGA.

ASIC

Unlike CPU, GPU, FPGA where computer hardware is used, ASIC (Application Specific Integrated Circuit) is a specialized mining package. It may not work for a computer or some other device. The solution is focused on working with the analysis algorithm. It has high performance, located far beyond other types of mining.

Pros and Cons

Options with CPU and GPU mining are the most budgetary. They allow you to switch from less profitable coins to more profitable ones quickly and easily, but at the same time, these options are already inefficient, like FPGAs and ASICs.

FPGA is much more efficient than CPU and GPU mining and can compete with ASIC. Automatically switch from coin to coin, but this requires programming and is not exactly a cheap way. Its cost is about 4000 US dollars. Also sellers don't give a long warranty in GPU detection, where warranty can be found even 3 years.

ASIC is a sufficient solution. Attachments in farms account for productivity and good profitability. Easy to play and does not require learning languages. But the solution is "sharpened" for only one algorithm. Changing it to another one is easy and fast, as in the case of CPU, GPU and FPGA, it will not work.

Top countries by Bitcoin hashrate

The total Bitcoin hashrate is 230 Eh/s.

  1. United States of America (35,4%)
  2. Kazakhstan (18,1%)
  3. Russia (11,2%)
  4. Canada (9,5%)
  5. Ireland (4,6%)

Timeline

Further Resources

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References

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