How Does Cryptocurrency Mining Actually Work?
Cryptocurrency mining is an abstract concept. This page has tried to summarize cryptocurrency mining from a layman’s perspective. Enjoy! Cryptocurrency mining is the process by which virtual currency transactions are verified on the blockchain. Additionally, it is the method by which new cryptocurrencies (i.e., Bitcoins, Dogecoin) are introduced into the Digital Money Marketplace. Miners are rewarded by various incentives which motivates them to watch Bitcoin transactions. Carefully watching these transaction help to legitimize, and validate the Bitcoin Mining processes.
My Layman Understanding of Cryptocurrency Mining
I asked myself what Cryptocurrency Mining really means? My conclusion was it would be most useful for me to understand the Actions involved in Mining Cryptocurrencies. Ok, so the way I understand the “Act of Mining Cryptocurrency” is fairly Simple. I love simplicity in everything. Because simplifying everything and anything makes them much more accessible.
And yes, I have a Coinbase Account!
Cryptocurrency Mining is Both Like a Computer Game, and A Safeguard to Protect Sellers and Buyers when they Exchange Money for Goods and Services
1. Functions Like Computer Game
This is my understanding of one dimension of the cryptocurrency mining process
- First to Mine Crypto, you will need a device such your Computer, or Smart Phone – Hardware.
- Additionally, You will also need computer programs – Software.
- Then computer programs are written that have predetermined Criteria coded into the programs as checks and balances just like in a computer game.
- When people are transacting business across the globe using cryptocurrencies. Miners search for solutions to potential problems during these transactions. When a solution is found, the problem is solved.
- This means, the software generates cryptographic numbers that match the Criteria, which allows for the transaction to go through upon verification. And Bingo, a reward is earned!!! Amongst a bunch of miners, the first to find the solution to the problem receives digital money as reward.
2. Functions as a Safeguard for Sellers and Buyers
When transacting business, especially buying and selling within our traditional databases, both the seller and buyer are vulnerable. I think this means when we transact business involving our traditional databases, there are no, or a limitation in witnesses to observe, verify and validate the transaction(s) actually went through as intended. For instance, the Seller could say he, or she failed to receive the money remitted, even when received. On the other hand, the Buyer could be dubious and claim he, or she did remit the money, when in reality they did not. All because they are no watchful eyes. That sucks, doesn’t it.
Wait a minute, there is a solution… Awesome!!
This is where cryptocurrency miners come in. During crypto transactions, miners are essentially auditors, who make sure Bitcoin users are honest. These miners get paid for being auditors. How cool is that? In other words, cryptocurrency transactions appear to be more regulated, and therefore, more secure than traditional database transactions.
Do you get what cryptocurrency mining is all about now?
Related Topics
Free Bitcoins – In Just Minutes
Inpersona and Helo Healthcare Smart Device
Turn Your Smartphone Into A Cash Machine
What are Smart Devices – Pros and Cons
Response Magic