Blockchain, Mining, and Processors - Cryptocurrency Fundamentals

 Cryptocurrency:

Cryptocurrency, a medium of exchange, is a 'Blockchain-based' technology, which literally means it is based on 'Blocks'. They are all stored in a blockchain where each blockchain has its own digital coin. These Blocks are packages that carry permanently recorded data. The most popular example is Bitcoin. As a transaction occurs, the information for each transaction is collected and then validated by the network. This data will eventually reach a predetermined size, and then will be combined into a 'Block'. As these blocks are created they do not stand solo - they become linked with the other blocks to form a chain [= blockchain].

• Synonyms of a Cryptocurrency: Digital Tokens, Tokens, Digital Assets, Digital Currency, Virtual Currency, Crypto Coins, Digital Coins, etc.
• Each crypto type has its own property and function.
• It is unlike a traditional currency - backed by a physical commodity such as gold or silver, or a Fiat currency like the U.S. Dollar (a legal tender) declared by the government which is based on the relation between supply, demand, and the credit of an economy.
• It can be considered as a Tech Stock than a Currency.
• It is a combination of Cryptography and Currency.
• Crypto Hitory:
• 2008 - White paper (https://bitcoin.org/bitcoin.pdf) introduced by "Satoshi Nakamoto" - an unknown person/people.
• 2009 - Released as open-sourced software
• 2010 - Control handed over to Bitcoin core developers
• 2011 - Altcoins introduced

The most impressive basis of this technology is that it is managed by a Peer-To-Peer network, which is a type of architecture that provides equal privileges for the workload and to perform tasks, such as making transactions.

Example Transaction ETH (Etherium) from one wallet to another is shown below:

Blockchain Technology: It is a file or a record or a ledger that can be publicly viewed as a journal to see historical transaction data. The transaction data block is linked to another block, as these blocks DO NOT exist alone. They become linked with other blocks (blockchain). Each block contains a proof of work (POW) identity and the previous block identity which verifies the amount of computational effort that has been done. A Blockchain protocol runs on a peer-to-peer network of computers and holds an identical copy of this ledger, which is public and everyone can inspect it and cannot be controlled by a single person.  

Mining Cryptocurrency: Identity verification. The process of validating cryptocurrency transactions in its bookkeeping/ledger/blockchain is called Mining. All transactions are verified using your computer/computing device/computing machine, all day. Each crypto has its own ledger recording each and every transaction. All of these transactions are added up until block status is achieved, and sent to the Miners afterward. The mining process occurs on multiple mining computers, all connected to a single peer-to-peer network. Miners use hardware, software, and data keys, called nonce - number only used once, to encrypt the block of data into a hash (sequence ID including block data).

A general list of what you will need for mining coins:

1. A wallet
2. Mining software
3. Mining pool acceptance
4. Register with a cryptocurrency exchange
5. The best internet you can afford
6. A cool space
7. Mining computer
8. GPU or ASIC chip
9. Fan
10. Time

Mining Processors: The CPU category needed to mine cryptocurrency works better with high configuration CPUs, consuming more Power (power is directly proportional to processor performance, but it can be altered by  an efficient design). More Number of Cores, High Clock Speed (high GHz), Cooling options, High Power Consumption, and sustain high Resale Value to sell it to the secondary market - These are some of the factors to consider while purchasing a Mining CPU. Another method of mining crypto is by using a GPU. GPU mining is considered faster. The best way to mine cryptocurrency, in my opinion, is by using an ASIC. They produce the most crypto units and are specifically designed to mine Crypto.

View LIVE Bitcoin Network Power Demand Here.

Posted by Priyavrat Bhardwaj 2022 ©