The cryptocurrency concept was first introduced in 2008 by Satoshi Nakamoto. He created the first blockchain that allows people to send money peer to peer and called it Bitcoin. The target was to create a system that was not dependent on any financial institution or government. Therefore, transactions had to be verified by computers competing to solve the puzzle. This method is known as proof of work. Since then, many cryptocurrencies that followed, such as Ethereum and Litecoin, adopted mining to verify their transactions. This article will cover all you need to know about cryptocurrency mining.
What is cryptocurrency mining?
Cryptocurrency mining is minting new tokens or coins by solving puzzles. It can be done using CPUs, GPUs, or ASIC miners. However, it’s impossible to mine some coins like Bitcoin because the difficulty level has increased, causing the reward to decline. Mining is a highly competitive activity, the more powerful your computers, the more coins you will mint. This process is very important because it verifies transactions and makes the network trustworthy.
Organizations and governments have also started mining as a source of revenue income. Individuals combine their computing power into large mining pools to compete with the big players. The proof of work mining consumes a lot of electricity. Using fossil fuels for mining activities is considered harmful to the environment. Therefore, most government’s crackdown on such miners to encourage clean energy such as hydroelectric power.
Cryptocurrency mining can be compared to gold mining. Both operations use powerful systems. Gold relies on large machines, while coins such as bitcoin rely on powerful computing power and algorithms. Mining also prevents double-spending making the blockchain safe and reliable. Apart from proof of work, other coins rely on proof of stake, which utilizes less computing power and allows fast transactions. You don’t need to use powerful computers to participate in proof of stake mining.
How to mine cryptocurrency
Mining proof of work coins requires hardware, electricity, and a mining pool. The most profitable miners are the ASICs specializing in mining a specific coin. However, a lot of people use powerful GPUs for mining. After setting up your hardware, you need to connect it to your wallet. The coins that you mine will be transferred to your wallet. Your profits will be highly determined with your mining algorithm, hardware, and the pool you join. Also, the price of the coin matters a lot. Miners make a lot of profit during the bull market.
If you don’t have powerful hardware, you can participate in proof of stake mining. All you need to do is purchase cryptocurrency and provide liquidity. Many exchanges offer proof of stake mining.
Best Crypto Mining Platforms
After mining cryptocurrency, you need to convert them into fiat currency in exchange. Besides, it is the best choice to join an exchange to participate in proof of stake mining, which can reduce a large number of technical setup steps to make stake mining easy.
When choosing a cryptocurrency mining platform, the key factors are supported coins, mining algorithms, reward system, minimum payment, and withdrawal fees. Gate.io platform has been operating stably for 8 years and has more than 1,000 cryptocurrencies. The platform supports a variety of mining methods, with a minimum payment threshold of $100, with very low withdrawal fees.
All new members receive a $100 bonus, among other benefits including receiving free point cards to deduct transaction fees, regular airdrops of SGD, and user draws. Gate.io has been in operation for eight years and has managed to serve millions of customers worldwide. It’s currently ranked among the top 10 best cryptocurrency exchanges globally.