Homework Task 4 : Introduction to Cryptocurrency Mining

Hey, this is @aniqamashkoor. I am writing my homework for lecture 4 by @besticofinder. I am following his lectures since week 1 and found them easy to understand and interesting. In this homework, I have learned all about cryptocurrency mining.

Homework Task 4

(1) How cryptocurrency mining works?
(2) What is Mining Difficulty?
(3) What are the challenges for cryptocurrency miners?

What is cryptocurrency mining?

The term crypto mining expresses the gain of cryptocurrencies by solving cryptographic equations with the aid of a computer. This process adds numerous cryptocurrency transactions and proof of mining work to the blockchain database. Cryptocurrency mining, in a more conceptual model, is a transactional methodology that utilizes machines and cryptographic mechanisms to solve complex operations and collect the data to a blockchain. In the easiest way mining is a process of adding a new block and filling that block with more transactions.

source

How cryptocurrency mining works ?

The blockchain is the backbone of all mining. This is a decentralized online ledger that keeps track of transactions across a network. A "block" is a series of authorized transactions. These blocks are joined together to form a "chain", with this fact the term "blockchain" derives.

1. Verification of Transactions: Cryptocurrency mining can never be done without verification of transaction so this is foremost, one of the most important task that all transactions must be verified. Once the transaction is verified it is then store in blockchain as a record.
2. Adding a Hash Value: Now the block is delivered by sufficient transactions, more information is delivered as well, inclusive of the header facts and hash from the preceding blocks withinside the chain and a brand new hash for the new block. The hash values are basically are a kind of check number for the transactions made and we can look for the transactions with its help.
3. Now it's the time for miners to make a guess about the encrypted code of the hash block that is going to be add in blockchain. The one who guess it correctly can add his block in the blockchain.
4. Confirmation: In this process other miners in the blockchain check the transactional information in the new block if it matches, the block is marked as valid and is added in blockchain.

What is Mining Difficulty?

The process to find a new block in blockchains by a process of mining or the search of a hash value is known as mining difficulty. It can be defined as the level of difficulty at which the proof of work algorithm is solved with the computing resources, it's average time is 10 minutes and after every 2016 blocks it gets adjusted taking in context the time spent on mining previously.

What are the challenges for cryptocurrency miners?

The miners also have to tackle with some difficulties and problems.

• High energy :
  A high amount of energy is needed by this process and so much energy consumption is demanded by mining process.

• Well established connection:
  Well-established power connections are required to ensure the successful mining.

• High risk:
  There is always a risk of hacking. People are all around always looking for shortcuts and steal the funds and personal data.

This was all from my side according to my study. Thank you so much please have a look.

special mentions;
@steemcurator01
@steemcurator02
@steemitblog