What is mining?

What is mining?

Good afternoon. Today we will analyze in detail what mining is. If you look at the cryptocurrency industry, this concept is quite common, along with the word Bitcoin. However, not everyone knows what exactly it means. If this is also new to you, our article will help you understand everything.

Digital currency mining: what is it?

Mining is the main type of digital currency extraction. For example, for the Bitcoin coin, this is the only way to obtain it. “Mining” means “extraction” in English. Therefore, people who are engaged in mining are considered miners. This activity is performed through the use of specialized equipment. But users often also use ordinary PC graphics cards that can be combined into entire farms. In fact, mining is needed to form a network of decentralized computers, or nodes, in other words. Why? They will help solve many tasks using their own computing power. The operation of such a network will become more decentralized if there are a large number of these PCs.

Of course, many people understand that mining is the extraction of cryptocurrencies. But the question remains how exactly the process takes place. As mentioned earlier, PCs connected to the network are capable of solving many mathematical problems set by the algorithm. Let’s give an example of what these tasks are. To do this, imagine that you have an A4 sheet in front of you with a cell. On it, a single number is written in each cell. The point is that your PC is given the following task: why is this number written in all the cells? Why is it written in each cell?

When a computer tries to solve such tasks, a record is made, as well as confirmation of the transfer in the Blockchain. In fact, this is mining. For example, to confirm a transfer in the Bitcoin network, you need to perform at least six confirmations from different nodes.

What types of mining are there?

The more popular digital asset mining becomes, the more types of mining appear. For example:

– conventional or using specialized devices;

– Cloud;

– Web.

Mining with specialized devices

At the time when mining became mainstream, it was no longer relevant to mine cryptocurrencies using ordinary PCs. Mining on video cassettes with a built-in graphic editor became in demand and popular. Today, however, other types of computing devices are also used to mine “digital gold”. For example:

– CPU mining (performed with the help of a processor);

– GPU-mining (carried out with the help of graphic processors);

– FPGA-mining (carried out with the help of video cards);

– Asic mining (performed with the help of specialized devices for mining digital currencies).

Cloud mining: what is it?

Nowadays, this type of mining is quite popular and in demand. Cloud mining is a special type of cryptocurrency mining. In this case, a miner rents equipment remotely. The equipment, in turn, belongs to a company that provides cloud mining services. It has become popular due to the difficulty of purchasing equipment in the CIS. Moreover, you do not have to deal with settings and monitor the operation of devices.

Web mining: what is it?

Web mining is also called browser mining. In fact, miners use this type of digital currency mining the least. You may have also heard that it is an alternative option for mining “digital gold”. Web mining is carried out through the browsers of visitors to a specialized website. Its webmasters use the power of the visitor’s PC to mine digital currencies.

When choosing the type of mining, it is important to look at such a significant indicator as profitability. First, you need to estimate the level of mandatory initial investments for mining. You also need to calculate the amount of expenses for each month in relation to the likely income. Only then can you choose the most profitable option for your own use. When choosing which digital currency to mine, be sure to take into account its complexity at the time. You can also use a specialized website that allows you to calculate the approximate income from the capacity of the mining equipment you have. By the way, this capacity is measured in mega-hash.

Mining farm: what is it and what types are there?

A mining farm is a separately assembled device consisting of equipment that makes it possible to mine various virtual assets. For example, video cards, processors, power supplies, etc. Due to the regular complication of digital currency mining, experienced craftsmen began to invent special installations that have even more power than simple PCs. The most famous mining rig is Asic. By the way, it is worth noting that mining farms can be completely different from each other in terms of size and their own functional content.