There is no doubt that Bitcoin is still the poster boy for the rapidly evolving cryptocurrency market, and that it has paved the way for other chips to follow.
This was confirmed by the historical price of the currencies in 2017, during which their value increased from $ 900 to $ 20,000 in 12 amazing months.
Bitcoin has also revolutionized the way money is produced, since there is no central authority that issues new tokens on a regular basis. On the other hand, it is possible to generate new bitcoins and similar virtual tokens through a process called mining, with a finite number available in the market.
What is the technology behind the mining cryptocurrency?
It is estimated that 17 million bitcoin tokens have been extracted to date, leaving around four million available.
The newer cryptocurrencies will have a higher volume of tokens than mine, while options like Feathercoins and Litecoins may offer a higher cost benefit for beginners.
The process of extracting encryption tokens is highly technical and depends largely on the ‘nodes’. The nodes are powerful computers that transmit specific types of information between them, and can be operated with simple bitcoin software packages and the required storage space (estimated at around 145 GB at the time of writing).
In the case of the so-called ‘mining nodes’, the objective is to group pending transactions into blocks and add them to the block chain (this refers to the decentralized accounting technology that registers each bitcoin transaction, providing an immutable storage of data that is accessible to everyone).
So, how is this goal achieved? In simple terms, the miners use nodes to solve a complex mathematical puzzle that is part of the bitcoin or cryptocurrency program, before including their response in the block. The riddle of the question is a random number that must be added to the existing data in the block to produce a result within a predetermined range, and this can only be achieved by guessing.
After all, there is no viable way to know what number will work, since two consecutive interns will offer fluctuating results that are not related at all.
Once a specific puzzle has been successfully solved, the miners will be rewarded with the transaction fees compiled in the block and the newly launched bitcoins.
The last word
A growing number of investors like to exchange bitcoins and similar cryptocurrencies through the purchase and sale of tokens, particularly in an era in which so many currencies have already been extracted.
However, mining can provide a more cost-effective (if time-consuming) route to the market, as long as you have the right hardware and software at your disposal.
This included the kind of free mining software package that we mentioned earlier, along with a specialized PC equipped with a high-end GPU, a high-speed Internet connection and the funds needed to cover the additional power consumption.
You will also need to register for a wallet purse, which is a password protected space in which you can store your successfully extracted tokens. If you intend to exchange these virtual tokens for cash or alternative currencies, you must also sign up for an online exchange as soon as possible.
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