It is easy to see that in the last decade, the computerization of everything has been observed throughout the world. Any sphere of human activity can be closely related to information technology. Here, users are able to keep confidential information, personal data, work documentation and even currency, and can use easily accessible resources for their own purposes. Electronic computing equipment (from stationary computers to global servers) helps in the management and automation of various technological processes. This trend has penetrated into the financial sphere for a long time. That is why most people are now interested in how to mine cryptocurrency.
Disclosure of the term "cryptocurrency" in simple terms
The well-known real national currencies like the ruble, dollar, euro, yuan have a long history. This is ordinary public money, which is backed by economic support from the governments of certain countries. Cryptocurrency is an independent digital currency, which is located exclusively in the virtual space. It does not have any outside support, is not subject to traditional banking systems and does not depend onfrom the political orientation of this or that state.
This has its advantages - popular cryptocurrencies do not become dependent on the authorities and international relations. They are protected by special encryption, which practically excludes the possibility of fraud, while ordinary consumers have many problems with real money. Their system is decentralized, and therefore invulnerable, moreover, all user transactions are not subject to any one specific server. In its simplest form, this is a set of code keys that is available to everyone and at the same time anonymous.
Where did she come from
The first penetration into the Internet space of the term "cryptocurrency" began when the payment system "Bitcoin" was formed, where each transaction and financial operation has its own unique code. Today it is the most popular cryptocurrency with a huge capital. It was created 12 years ago by the Japanese developer Satoshi Nakamoto or a group of people with that pseudonym. The smallest unit of currency is therefore set to "satoshi".
Later this system had various offshoots. At first, the open source code of the currency was used in the software, and after 2013, other platforms appeared that supported not only the cryptocurrency itself, but also structures related to it. Such services also host websites of trading exchanges, shops, instant messengers, and so on.
How it works
DisassembledThe theoretical part of how a cryptocurrency functions is to learn how to mine and use it. Many are wondering how it all works and why it is globally popular. All processes in the system are irreversible and unique. The hash functions of cryptocurrencies are based on this. Simply put, a hash is an encrypted chain of a certain length and number of characters, into which the original information was converted. If at least one element changes, the whole chain changes, and the source cannot be returned.
To understand how to mine cryptocurrency, you need to know about the main technology in this process - blockchain. Translated from English, this means a chain of blocks, which stores data on all transactions carried out since the founding of a particular currency. Therefore, hacking such a system is almost impossible. This element is expanded with new blocks that are created by miners-developers using computing resources. Its copies are available to every user and miner of the cryptocurrency, the price of which is only increasing.
How miners promote currency
Each block contains information about different transactions and the hash of the previous block, thus creating a chain. The appearance of a new block means that the miner solved the problem and received a reward for it. This is called cryptocurrency mining. The process itself is a search for a cryptographic signature of a new block that will enter the chain. The reward decreases over time as currency is a limited resource andthere are more and more miners every day, which clearly complicates getting the coveted coins.
Blocks have branches, people are also looking for them, and there are special services that allow you to combine their work to find a new chain element. Here the reward will be shared between those who have been mining cryptocurrency by finding the hash of a separate part.
What technologies do users work with
Many miners are mining electronic money using cloud mining technology. The advantages are that you don’t need to ask yourself “how to start mining cryptocurrency at home” and try to understand the intricacies of the technology needed for this. Here you do not need to control the cost of electricity, monitor the process and the state of the equipment, configure the software. Everything will be done for a nominal fee by certain services: HashFlare, GenesisMining, BitMiner, etc.
Safe or risky
There are more risks in cloud mining than in independent mining. Firstly, you are using someone else's intermediary server, so there is a danger of a hacker attack. Secondly, on unreliable services, you can run into scammers. The obvious disadvantage is that some percentage of the final income will go to the intermediary. The price of cryptocurrency jumps, if not daily, then weekly, different sites offer different prices. Therefore, it is important to find a trusted platform to control the exchange rate.
This currency is not subject toinflation and is protected within the servers on which it is mined. Cryptocurrency services use PoS and PoW security methods, which work together to distribute coins between miners and confirm blocks. This greatly reduces the risk of attacks. The disadvantage is that now, when medium and large players can mine, an ordinary user simply cannot get involved in the process without proper equipment, and for a long time he will go into the red. Having lost the key and password to the wallet once, it will not be possible to restore it. In addition, no one guarantees the absence of a negative reaction of state bodies to the additional income of their citizens "out of nothing".
Where to use
Cryptocurrencies have a problem of uncertain legal status. In some countries they are banned, in others they are simply not recommended for use. They can be used on exchanges, where only the most popular and sought-after currencies are represented, they can be sold and bought, exchanged. After the user has mastered how to mine cryptocurrency, he begins to be interested in how to implement it. In addition to selling and exchanging, some sites offer the purchase of goods and services with bitcoins. This is not the best option, given how quickly the exchange rate changes. But with the help of such services, you can make purchases of cars, equipment and software, make donations, pay for air travel.
What determines the course of thiscurrencies
Nothing but supply and demand regulates the price of electronic money. At the very beginning of its functioning, in 2009, bitcoins only accumulated, having practically no price. Until about 2013, they continued to be in a floating state, and their rate grew very slowly. Almost no one believed in electronic payments. This summer, the highest price for the currency was recorded - about 3 thousand dollars.
It took many years for it to grow to this extent. Although the cryptocurrency has again collapsed by a thousand dollars, one cannot but agree that such a price is also more than attractive. The limited financial resource makes it in demand, so there is no reason to believe that it will slide back to its past state. To choose which cryptocurrency to mine, you need to monitor prices on the relevant sites for some time.
Near future and prospects
Some financial analysts equate electronic money ambitions with gold. Not surprisingly, many holders invest in stability. The outlook for cryptocurrencies is that they will continue to rise over time, so it makes sense to invest in them as well. Of course, there is no need to bet in the long term, since none of the currently existing currencies can provide reliable support, and it is also unknown how the exchanges and markets will behave many years later.
Cryptocurrency is a free, independent, unregulated payment system, and these qualities make it a success. Relative safety and stable growth causesome trust, while others have the idea that this is an economic bubble that will burst over time. And, of course, the prices and forecast of cryptocurrencies are influenced by the media and the reaction of the public.
Equipment for earning money
Before starting the mining process, you need to solve the most important task - to select the necessary equipment. Video cards or their combination (farms) are exactly the devices that will carry out all the calculations and generate income. It is not enough to know how to make money on cryptocurrency, because it is still important to study the equipment market. Before you buy video cards, based on their power, calculate how big the cost of electricity will be. NVIDIA devices are great.
You should not skimp on a quality processor, even though it is not involved in the work. You also need to take care of good ventilation, because mining equipment is under heavy load. Due to the increased work, video cards can make a lot of noise, so it is best to install such a farm in the basement or in a room with thick walls if possible.
What causes failures
It is not enough to know how to make money on cryptocurrency, you also need to take into account all the complexities of the process. Many would-be miners buy entire farms to work with but give up quickly with no idea how to properly operate them. To begin with, a specific hash is given that needs to be calculated. Since there are many seekers of it, and those who have high power and productivity equipment are busy in the process, the system changesthe difficulty of finding the hash.
With the increase in the number of zeros at its beginning, the complexity of the computational process also increases. Also, failures are associated with inappropriate equipment. Users who are set on how to get cryptocurrency in a reliable way without investments and quickly are doomed to failure in advance. After all, any equipment in capable hands will pay off in a maximum of a year.
How to buy or sell
Cryptocurrency trading is currently a very profitable business. It has a high cost and is safe. To send your coins to the buyer, you must fill out an application, which will indicate the transaction by which the currency ended up with the user, the number of bitcoins and the address to which they need to be sent. The application receives an individual key signature. This transaction then ends up in a block through mining, and the account can be considered to have been funded. For the coins received, the buyer transfers money in real currency in any way.
On special sites you can watch courses from various services. For profitable cryptocurrency trading, you just need to choose a platform with the highest rate. On some of them, it can be immediately exchanged for real money or transferred to an electronic wallet. The harder the currency is mined, the more expensive it will be on the exchange.
