A beginners guide to Bitcoin and Blockchain Technology

Cryptocurrency transactions are verified by the process known as mining. Miners are nodes that solve complex mathematical problems to enable the transaction to happen.

 

 

Although you could once mine your own cryptocurrencies using a standard PC, this isn’t viable any longer; the quality and quantity of hardware required to mine cryptocurrencies effectively is directly proportional to the volume of people deciding to mine. The physical components that are needed for mining involves specialized or consumer hardware and a combination of your graphics cards and CPU. 

 

First of all you’ll have to download the software you need to mine a specific coin and edit an executable text file which contains information like the mining pools URL to connect to, your wallet address and the name of your PC. More advanced options enables you to adjust how hard the GPU or CPU would work. The vast portion of this software works across Windows and Linux and it’s more difficult to configure it on non-Windows systems.

 

In order to successfully create a block, you must accomplish matching a hash to the correct criteria. When the correct hash is found, a new block is formed and the miner is awarded with units of cryptocurrency for his work.

 

Once the blocks are solved by the nodes and coins are released, the pool automatically pays the miners directly into their wallet, or to an online cryptocurrency exchange that holds many different types of coins.

 

In practice, this means that miners are competing against each other to calculate as many hashes as possible, in the hopes of becoming the first one to accomplish  the solution, form a block and get their cryptocurrency reward.

 

As the difficulty level of calculating the hashes increases, every new block of any cryptocurrency becomes harder to mine. This is a deliberated move so as to ensure that the rate at which new blocks are created remains steady.

 

Our friends at Bitcoinfy.net developed an interesting infographic on Bitcoin and Blockchain Technology for beginners. Please check the following infographic and share your thoughts.

 

 

 

 

 

 

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