4 . Introduction to Cryptocurrency Mining | Steemit Crypto Academy | Lesson 4

in SteemitCryptoAcademy2 months ago (edited)

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Dear Friends,
Today we are starting a new topic. My first 3 lessons provided the fundamental knowledge which is required for a newbie who is entering the crypto currency industry. I like to invite you to go through them if you need the basic knowledge to start trading.

Lesson 1 - Introduction to cryptocurrency trading
Lesson 2 - Introduction to cryptocurrency trading
Lesson 3 - How to spot trade ? Everything a beginner need to know

Today I'm going to discuss about cryptocurrency mining with you. Crypto mining is a wide topic. There are different methods and technologies used and need to get a overall idea about everything to be a successful miner. So my dear friends , let's see what is crypto currency mining.

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What is Cryptocurrency Mining ?


The conventional method of issuing a fiat currency is governed by a central government of a country . For crypto currencies , the story is different as the majority of cryptocurrencies decentralized. So there is no one to verify the transactions within the network. This part is done by crypto currency miners. Let me explain this simply like this , Crypto Currency Mining is the process where a computer / machine performs a task and earn cryptocurrencies. That task here is the process of verifying crypto transactions (solving mathematical equations ) and inserting them to the blockchain. So as you can see Crypto Currency Mining is the process which keeps these crypto currencies active by enabling their transactions. Let's understand this process with a simple example.

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If you look at the above diagram , Simon wants to do a payment to James using bitcoin. So Simon login to his bitcoin wallet with private key and requests a transaction to James bitcoin wallet for the payment amount. After submitting the transaction request , that request is bundled in to a block , in blockchain network with other blocks. This new block is broadcasted to all the mining nodes in bitcoin blockchain network . Then the process called mining starts. These nodes validates this transaction through processing mathematical algorithms. The miner who validate this first gets a amount of Bitcoin ( or the currency mining ) as a reward. Now after the validation , the transaction is confirmed and completed with a new permanent block added in to the blockchain.


[Source : https://www.youtube.com]

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What is Proof of Work ?


This is commonly called PoW. A blockchain network of a particular cryptocurrency is a series of blocks. These blocks in a blockchain have a set of data or a chain of data which we call "nonces". These data chains are attached each block of the blockchain network. They are like a group of memories , we call it mempool. When mining the particular cryptocurrency , the miner ( computer/machine) need to find the correct nonce by processing complex mathematical computations. They need to continue it until the exact data string is processed. This process is called Pow , which is a set of complex steps. When the miner found the complete hash value , it announce it to the blockchain network and other nodes will validate it. Then a new block is created. This procedure is called the PoW. PoW algorithms shows a great resistance to different attacks on networks but the power consumption is high, which is a disadvantage.

What is Proof of Stake ?


PoS(Proof of Stake) can be considered as an alternative to PoW (Proof of Work) to create blocks in a particular blockchain. In PoS, block producer is called a validator instead of a miner. A validator must keep a deposit / hold and stake to participate the process of creating blocks in a particular blockchain.. In PoW, as I explained before the miners compete each other to create a new block. First miner to complete and produce a block will be rewarded. This is the miner with maximum computational ability. But in PoS, the validators are selected based different mechanism. Here the algorithm which select the validator consider the amount they stake. When the validator is selected through the algorithm , it get the authority to create the block. So other validators do not need to waste their processing power and energy as they are not selected at first. This will save lot of energy compared to PoW.

Proof of Work and Proof of Stake differences compared clearly in the following video. Please go through it to get a clear idea.

[Source : https://www.youtube.com]

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What is a Mining Pool ?


Mining pool is simply a group of individual miners who work as a team to increase their probability of completing a block. The chance of finding / solving a block as a group is higher compared to individual. So what happens is , through this mining pool concept miners combine their computational ability together. So as a team they have a higher processing ability and it will give the output quickly. When considering the rewards, the reward earn through mining pool is divided among the members of the pool. So the income is comparatively high compared to individual mining.
There are number of mining pools. Most of them are designed to mine a selected crypto currency. Some of them allow to select between a set of cryptocurrencies. When selecting a mining pool we have to consider the hashrate , pool size , currency , terms and fees , payout options and amounts etc. After selecting a particular mining pool you need to configure the hardware and software accordingly. After that you can start mining. I will mention some leading mining pools. You can check them out. Poolin , F2Pool , AntPool , Houbi.Pool ,ViaBTC etc.

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You can check the live data of different mining pools from here

For this topic there are lot of areas to cover. We need to learn about mining hardware's ( and different methods of mining (CPU mining, GPU mining -Nvidia 2060 |AMD 5700 XT , ASIC mining -Antminer Z15 |Toddminer C1, Cloud mining -Hashflare |Genesis Mining ) . And we need to discuss about crypto mining software's (Claymore , MultiMiner , CGMiner etc) . Let's discuss them in out future lessons.

Thank you

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Homework Task 4

You need to do your own research and create an article discussing following topics,

(1) How crypto currency mining works ?
(2) What is Mining Difficulty ?
(3) What are the challenges for crypto currency miners ?


Guidelines


• Your homework post should be posted in crypto-academy community.
• Your article should be at least 300 words.
• You have to create a simple guide in a way a newbie can understand and follow the steps.
• No plagiarism please . You can use images taken from copyright-free sources mentioning the source.
• The final submission date will be 07/03/2021
• Add tag @besticofinder in your post, it will help me to find your submission. Use #cryptoacademy and #besticofinder-week4 , so that Steemit Team can find you.

Thank you.
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Cc:-
@steemitblog
@steemcurator01
@steemcurator02

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#cryptoacademy #trading #begginers #introduction #besticofinder-week4 #mining

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This image explained it very well, very helpful post dear 💖
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helpful indeed 👍

Hello dear professor, after so much researching, reading, and reading over and over again, in order to learn and master cryptocurrency mining and how it works, I was finally able to finish my homework, I'll leave it here, I hope you can review it. Greetings and thank you very much for sharing your wisdom.


Crypto Academy Week 4 | Homework: Cryptocurrency mining and how it works [ Task 4, by @besticofinder]

verified. Thank you

Excellent article professor, I was wondering if I could translate your publications into Spanish?

=)

Thank you. Yes , no problem you can translate and share.

Thank you @besticofinder for providing this wonderful lesson. Cryptoacademy have really helped me to gain knowledge about cryptocurrency and i look for to participate in the next lessons. Below is the link to my homework task:
https://steemit.com/hive-108451/@reminiscence01/steemit-crypto-academy-or-homework-task-4-for-besticofinder-or-introduction-to-cryptocurrency-mining-or

verified thank you

Thank you for this awesome lesson
@besticofinder
This is my submission for my post for week 4 below.

https://steempeak.com/hive-108451/@mandate/crypto-academy-week-4-homework-post-for-besticofinder

verified , Thank you

Hi! Thanks for sharing this information
I hope you can give a look to my drawings. 🤗💜

Interesting topics and Amazing set of questions professor. It will be very interesting to do these.
And also check my homework of previous week. I had done that . 😁
Thank you...

Dear @besticofinder

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muy util tu publicación, gracias

Dear!
@besticofinder. Your details about mining system and cryptocurrency mining is really very nice. Images and words are so accurate that can be understand easily by newbai as well as others. My homework week 4 is here.

https://steemit.com/hive-108451/@azamrai/crypto-academy-week-4-homework-for-besticofinder

Thanks

verified. Thank you

Dear! @besticofinder
It is your greatness to behave well.

Dear professor @besticofinder, it's a privilege to learn from you and I present my entry as I've successfully solved task , now opened to you for review. Thanks for your time. The link to my task follows;

https://steemit.com/hive-108451/@fredquantum/steemit-crypto-homework-task-4-cryptocurrency-mining-how-crypto-mining-works-or-or-lesson-by-besticofinder

verified. Thank you

Hello!
Good post, Thanks for sharing this important information

This post is really an interesting one, it's as if I should not end the reading.
Obviously Prof. @besticofinder is a great teacher. And I'll endeavour to participate in this one.

Yo p
Siempre he querido tener conocimiento de el mundo de la criptomoneda puedo hacer esos cursos sin tener nada de conocimiento es decir soy analfabeta en criptomoneda

Wow what a wonderful lesson..

Thanks my good friend @besticofinder

This is my homework links here

verified. Thank you

This is highly informative

Good work Prof. @besticofinder
It's my first lesson in this class and I must confess I enjoyed it. Easy to understand.

Hence my homework submission

Crypto Academy Week 4 // Cryptocurrency Mining // Submitted to @besticofinder.

Thanks and keep it up.

verified. Thank you

Greetings teacher, this is my task number 4, I congratulate you for being attentive to us and dedicating much of your time in correcting and grading each task, thank you very much @besticofinder
@steemcurator01
@steemcurator02

https://steemit.com/hive-108451/@laser145/introduction-to-cryptocurrency-mining-besticofinder-or-steemit-crypto-academy-or-lesson-4-by-laser145

verified. Thank you

Thank you so much for this detailed lecture. please go through my homework professor. This is my homework

verified. Thank you

i am learning from this post..

verified. Thank you

Hello professor, I have made a homework 4 days ago, and you have voted for my post, but I haven't received any reviews yet, I will be happy if you check it again 😊:
https://steemit.com/hive-108451/@asmaulnurul/crypto-academy-week-4-homework-post-for-besticofinder-introduction-to-cryptocurrency-mining-lesson-4

verified. Thank you

Hello dear @besticofinder! This is my homework

Thank you very much!!

To get rich, you need to accept something so inconceivably a long way from your scope, with a little difficult work and commitment, is really conceivable to snatch. Enthusiasm, good thoughts

Hello Professor @besticofinder you have not made any comment on my homework post for week 4..... Here's the link

https://steemit.com/hive-108451/@samuel20/crypto-academy-week-4-homework-post-for-besticofinder-or-or-05-03-2021-or-introduction-to-cryptocurrency-mining-or

Last week(week 3) my homework on your lecture was not voted.

verified. Thank you

verified. Thank you

Dear Professor, last time I did not get your feedback on the assignment. I would like to know the evaluation of the previous one and this one that is pending. I know the work is extensive, I will be patient.
I leave it here: https://steemit.com/hive-108451/@slwzl/how-to-invest-in-cryptocurrencies-a-beginners-guide-or-steemit-crypto-academy-or-lesson-6-homework-task-6-by-slwzl

Thank you very much

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