It is easy to see that in the last decade, the computerization of everything has been observed everywhere in the world. Any area of human activity can be closely related to information technology. Here, users are able to keep confidential information, personal data, work documentation and even currency, can use readily available resources for their own purposes. Computer technology (from desktop computers to global servers) helps in the management and automation of various technological processes. In the financial sector, this trend has penetrated a long time. That is why most people are now interested in how to mine cryptocurrency.
Disclosure of the term "cryptocurrency" in simple words
Well-known real national currencies like the ruble, dollar, euro, yuan have a long history. This is ordinary government money, backed by economic support from certain governments. Cryptocurrency is an independent digital currency, which is located exclusively in the virtual space. It does not have any outside support, is not subject to traditional banking systems and does not depend on the political orientation of a state.
This has its advantages - popular cryptocurrencies do not become dependent on the authorities and international relations. They are protected by special encryption, which virtually eliminates the possibility of fraud, while ordinary consumers have many problems with real money. Their system is decentralized, and therefore invulnerable, in addition, all user transactions are not subject to any one specific server. In its simplest form, it is a set of code keys that is accessible to everyone and at the same time anonymous.
Where did she come from
The first penetration into the Internet space of the term “cryptocurrency” began when the Bitcoin payment system was formed, where each transaction and financial transaction has its own unique code. Today it is the most popular cryptocurrency with huge capital. It was created 12 years ago by the Japanese developer Satoshi Nakamoto or a group of people with such a pseudonym. The smallest unit of currency is why Satoshi is established.
Later, various branches appeared in this system. At first, the software used the open source currency code, and after 2013, other platforms have already appeared that support not only the cryptocurrency itself, but also the structures associated with it. On such services are also sites of trading exchanges, shops, instant messengers and so on.
How it works
Having examined the theoretical part of how cryptocurrency functions, you need to learn how to mine and use it. Many people wonder about the scheme by which all this works and why it is world-famous. All processes in the system are irreversible and unique. This is the basis for the hash functions of cryptocurrencies. Simply put, a hash is an encrypted chain of a certain length and number of characters into which the original information was transformed. At least one element will change - the whole chain will change, and the source will not be able to return.
To understand how to mine cryptocurrency, you need to know about the main technology in this process - blockchain. Translated from English, this means a chain of blocks in which data is stored on all transactions conducted since the foundation of a particular currency. Therefore, hacking such a system is almost impossible. This element is expanding with new blocks created by miners-developers using computing resources. Its copies are available to each user and cryptocurrency miner, whose price is only increasing.
How Miners Promote Currency
Each block contains information about various transactions and the hash of the previous block, thus creating a chain. The appearance of a new block means that the miner solved the problem and received a reward for it. This is called cryptocurrency mining. The process itself is a search for the cryptographic signature of a new block that will go into the chain. The reward decreases over time, as the currency is a limited resource, and there are more and more miners every day, which clearly complicates the receipt of treasured coins.
Blocks have branches, people are also engaged in their search, and there are special services that allow them to combine their work to find a new element of the chain. Here, the reward will be shared between those who were engaged in cryptocurrency mining by finding the hash of a separate part.
What technologies do users work with?
Many miners are engaged in the extraction of electronic money using cloud mining technology. The advantages are that you don’t have to wonder “how to start mining cryptocurrency at home” and try to understand the intricacies of the work needed for this technique. Here you do not need to control the cost of electricity, monitor the process and condition of the equipment, configure the software. Everything will be done for a nominal fee by certain services: HashFlare, GenesisMining, BitMiner, etc.
Safe or risky
There are more risks in cloud mining than in independent mining. Firstly, you use a third-party intermediary server, therefore there is a danger of a hacker attack. Secondly, on unreliable services, you can run into scammers. The obvious minus is that some percentage of the final income will go to the intermediary. The cryptocurrency price jumps if not daily, then weekly, different sites offer different prices. Therefore, it is important to find a trusted site to control the course.
This currency is not subject to inflation and is protected within the servers on which it is mined. Cryptocurrency services use protective methods of PoS and PoW, which, when working together, distribute coins between miners and confirm blocks. This greatly reduces the risk of attacks. The disadvantage is that now, when medium and large players can mine, an ordinary user will simply not be able to get involved in the process without proper equipment, and for a long time he will go to minus. Once you have lost the key and password to your wallet, you won’t be able to restore it. Moreover, no one guarantees the absence of a negative reaction of state bodies to the extra income of their citizens "out of nothing."
Where can i use
Cryptocurrencies have a problem of uncertain legal status. In some countries they are prohibited, while in others they are simply not recommended for use. They can be used on exchanges where only the most popular and sought-after currencies are presented, sell, buy, exchange. After the user gets accustomed to how to mine cryptocurrency, he begins to be interested in how to implement it. In addition to selling and exchanging, some sites offer the purchase of goods and services for bitcoins. This is not the best option, given how fast the course is changing. But with the help of such services, you can make purchases of cars, equipment and software, make donations, and pay for flights.
What determines the rate of this currency
Nothing but supply and demand regulates the price of electronic money. At the very beginning of its operation, in 2009, bitcoins only accumulated, with practically no price. Until about 2013, they continued to be in a floating state, and their rate grew very slowly. Almost no one believed in electronic payments. This summer, the highest price for the currency was fixed - about 3 thousand dollars.
It took many years for it to grow to such a scale. Although the cryptocurrency has fallen off again by a thousand dollars, one cannot but agree that such a price is also more than attractive. The limited financial resource makes it popular, therefore there is no reason to believe that it will slide to its past state. To choose which cryptocurrency to mine, you need to monitor prices on the relevant sites for a while.
The near future and prospects
Some financial analysts equate the ambition of electronic money with gold. Not surprisingly, many holders invest in stability. The forecast for cryptocurrencies is such that they will continue to grow over time, so it makes sense to invest in them. Of course, you do not need to bet in the long run, since none of the current currencies can provide reliable support, and it is also not known how exchanges and markets will behave after many years.
Cryptocurrency is a free, independent, uncontrolled payment system, and thanks to these qualities it is a success. Relative security and stable growth inspire confidence in some, and others - the idea that this is an economic bubble that will burst over time. And, of course, the prices and forecast of cryptocurrencies are influenced by the media and public reaction.
Equipment for earning
Before starting the mining process, you need to solve the most important task - to choose the necessary equipment. Video cards or their combination (farms) are precisely those devices that will carry out all the calculations and generate revenue. It’s not enough to know how to make money on cryptocurrency, because it is still important to study the equipment market. Before you buy video cards, based on their capacity, calculate how big the cost of electricity will be. NVIDIA devices are great.
Do not skimp on a high-quality processor, although it does not participate in the work. It is also necessary to take care of good ventilation, because the mining equipment is under heavy load. Due to the increased work, video cards can make a lot of noise, so it is best if possible to install such a farm in the basement or in a room with thick walls.
What are the failures associated with
It’s not enough to know how to make money on cryptocurrency, you still need to consider all the difficulties of the process. Many potential miners buy whole farms for work, but quickly give up, having no idea how to work with them competently. First, a specific hash is given that needs to be calculated. Since there are many of its seekers and those who are busy in the process and those who have high power and performance techniques, the system changes the complexity of finding a hash.
With an increase in the number of zeros at its beginning, the complexity of the computational process also increases. Failures are also associated with inappropriate equipment. Users who are set up on how to get cryptocurrency in a reliable way without investments and quickly, are doomed to failure in advance. After all, any equipment in skilled hands will pay off in a maximum of a year.
How to buy or sell
Cryptocurrency trading is currently a very profitable business. It has a high cost and is safe. In order to send your coins to the buyer, you need to fill out an application in which the transaction will be indicated, by which the currency was obtained from the user, the number of bitcoins and the address to which they should be sent. The application receives an individual signature key. This operation then appears in the block through mining, and we can assume that the account has been replenished. For the received coins, the buyer transfers the money in real currency in any way.
On special sites, you can watch courses from various services. For profitable cryptocurrency trading, you just need to choose the platform with the highest exchange rate. On some of them, it can be immediately exchanged for real money or transferred to an electronic wallet. The more difficult the currency is, the more expensive it will be on the exchange.