An overview of the nature of cryptographic digital currency mining.

Eight years have passed since cryptocurrency became a substitute for paper money, and during that time they became substitutes for stock options trading. The idea behind the cryptocurrency is to get rid of the power of the state and central Banks to ensure the accuracy, safety and compliance of transactions and to issue new currencies.

In fact, the mining process consists of two activities: keeping the latest copy of the transaction log and solving the digital problem to create a new currency. You can use a fixed number of cryptocurrencies to reward each challenge.

Block chain

The basic element of any cryptocurrency is the blockchain, which is the digital ledger technology for all transactions that have occurred since the encryption currency began to be used. Before recording in the block chain, each operation is validated by a different entity (miner), because once written, it cannot be undone. The number of checks per token is also inconsistent, and bitcoins need to be verified three to thirty times. The security of the blockchain is determined by the fact that the record is decentralized and distributed, so no entity can control it, but anyone who USES it can verify it.

As long as no one is controlling more than 50% of the network computing ability, the technology is safe, this is known as the "51%", in this case is dangerous, because it provides control entities to prevent the possibility of trading, and can make the same tokens, repeated use.

The process of mining

The purpose of the mining process is to collect award tokens, which help to keep ledger and new tokens generated by the small costs associated with each transaction and to help solve the problem. These operations require a lot of computing power.

A brief history of mining type.

At the beginning, a CPU was enough to dig the mine, and the original idea was to use your own computer to mine Satoshi. But the current complexity requires a lot of hardware for mining.

GPU mining

GPU mining is still viable, although it is small, it is a DIY solution and a good start to understanding the process. You need to take into account the memory, cost, power consumption, and the fact that a decent rate of return will require more than one card. You can still use such a setting to mine other tokens, although these tokens are not currently popular, but for bitcoin, it is a viable option. The reason for this setting is that it is universal, and I can continue to play my game with the same configuration.

The FPGA dig

When GPU mining becomes competitive, the solution is to use the field programmable gate array (FPGA). FPGA entered the market in 2011. Compared with GPU, FPGA is favored by users with its superior computing power and lower energy consumption. And its quality is about 10 times higher than the GPU.

ASIC dig

The next step in the mining technology is the special integrated circuit (ASIC), which has created specific tools for the mining of bitcoins and COINS. It was very revolutionary at the time, because when KNCMiner released their orders to ASIC miners, they received orders of $25 million in the first five hours. This highly specialized machine has only one purpose and is the gold standard for bitcoin mining.

Its assessment of mining equipment is done through its ability to hash, hash ability for application-specific integrated circuit is measured by Gh/s, or by its (J/Gh) to measure the efficiency, in addition, the quality of ASIC and FPGA 10 times.

Mining pool

Cryptographic money mining is an idea that rewards early adopters. With companies like Google (GuGe) and Microsoft (MSFT) already spending millions of dollars on blockchain research and equipment, it seems a little late to join the trend.

However, in order to give anyone who joins the game an opportunity, the pool is helping miners share the risks, costs and benefits by integrating resources. You can connect many mining pools based on the computing power you can afford. By joining such a guild, you will have the opportunity to score points commensurate with your efforts.

Join the larger pool of funds, faster and more frequently get rewards, it sounds very tempting, but it is dangerous for the health of the network, because it can lead to dangerous concentration of power, may lead to the above 51%.

The cost of

Using your CPU or even GPU for mining is inefficient, which is likely to lead to the production of bitcoins that are less than your power costs, not to mention profits. In addition, starting a second-hand system costs another $300 to $500.

Software, on the other hand, is open source and free. If you want to join a mining pool, they can help you install all the programs you need and make the right configuration.

After the trend of SaaS, there are countless mime - as - a - Service (mining services) to choose from, they are responsible for the initial investment, update and maintenance, and you only need to pay to join mining pool, you can get the reward of conventional miners and don't have to worry about infrastructure.

Is it profitable?

These large price hype spurred more people to join the encryption to the currency investment trends, however, anyone who are interested in should be aware that this is still a highly unstable, and due to its deregulation and the characteristics of diversification, it is not affected by usually hedging strategy.

People should consider the initial cost of investment, including the necessary hardware, regular upgrades, and the daily energy costs required to run the system under the highest parameters. Then make rational investments.