in cryptocurrency has taken the internet into ablaze. Following the huge success and media coverage Bitcoin has taken in the past years, everybody is wondering, how do we even get one coin? Is it really that hard for me to find one? How do I even set up my own mining farm to find that one coin?
First and foremost, mining in cryptocurrency is really like actual gold mining. That analogy still remains relevant today because as it is compared to gold, there is only a limited amount all over the world, the same with cryptocurrency mining. The more you take out of it, the more difficult and scarce will it be. With that out of the way, there are special computer and programs modified to the task of mining cryptocurrency. Cryptocurrency miners will use these specially rigged computers to solve complicated mathematical problems and in return, they will be given a coin as a reward for validating the previous transactions made by users. In every ten minutes, these hardwares will compete to solve a block that has the latest transaction embedded on it using cryptic hash functions. Hash functions? These are simply one-way encryption without a key; it’s like being locked up inside and other users are trying to figure out how to open it through the mathematical equations given to them to be solved. It takes an input and returns a somewhat random, but fixed length hash value. If one letter of the original input is changed or manipulated, a completely different hash value will be returned. This randomness surely makes it impossible to predict the next output.
What is with the hash functions? Since they are virtually impossible to be predicted, hash functions are used as proof of work and a validation. Miners will need to compete in order to find an input that gives out a specific hash value. This hash value will be needed by your computer to guess it first correctly before a reward is given. Learn more about cryptocurrency mining through one of our online learning seminars.