What is crypto mining?
Mining is the proces of verifying transactions and adding blocks to the blockchain. Crypto miners use powerful computers running specialised mining software that can solve a mathematically difficult, cryptographic puzzle. Once a miner verifies a block it can be added to the blockchain. Mining is important task of maintaining the blockchain. As a reward for this work, the miner receives payment in the cryptocurrency just mined.
Basics of cryptography
SHA-256 – the mining algorithm used by bitcoin. When you pass a word through SHA-256 you will be given back an unrecognizable string of letters and numbers called a “HASH”. For example, the SHA-256 of the word “BUTTERFLY” (source) is “8c62ace4f9ef8ccd08ca6fb992a8524bb7dbdc0530654bd254c9da07a660949a” (HASH).
Can you still making money mining bitcoin?
Making money mining bitcoin is much more difficult today. Some of the issues contributing to this difficulty include: hardware prices, rise in corporate miners, calculation difficulty and power costs.
Other type of mining
Proof-of-work mining used by Bitcoin requires a massive use of energy and as more people use blockchain the confirmation of transactions gets slow and expensive . Proof of Stake is another concept where miners can mine or validate transaction according to how many they hold. Design of the new effective, safe and scalable mining consensus protocols remains the biggest challenge for the future of cryptocurrencies.