Assalamu Alaikum everyone how are you doing I hope that everyone is doing good since morning I have been trying to write this post and it took me so many hours to write this I had idea about how all this thing work but I just want you to gain more knowledge by being the searching since morning and now I have complete it the post Well I think the first topic I have explained a little bit long I am so sorry for that but I can't cut anything from that now because if I do you it will destroy the whole paragraph which I don't want so I wrote this big because I was writing this in Microsoft world and I didn't realise that it's that  so that's it and now let's start if you don't understand anything you can write in the comments and I will try to reply you

(1) How crypto currency mining works ?





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Bitcoin  was created as a decentralized  alternative to the banking system this  means that the system can operate and  transfer funds from one account to the  other without any central authority with  a central authority transferring money  is easy just tell the bank you want to  remove 50 dollars from your account and  edit to someone else's account in this  case the bank has all the power since  the bank is the only one who was allowed  to update the ledger that holds the  balances of everyone in the system but  how do you create a system that has a  decentralized ledger how do you give  someone the ability to update the ledger  without giving them so much power that  they'll become corrupt or negligent in  their work well the rules of the Bitcoin  system known as the protocol solves this  in a very creative way I like to call  who wants to be a banker in short anyone  who wants to participate in updating the  ledger of Bitcoin transactions notice  the blockchain can do so all you need to  do is guess a random number that solves  an equation generated by the system  sounds simple right of course  this guessing is all done by your  computer the more powerful of a computer  you have the more guesses you can make  per second thus increasing your chances  of winning this game if you manage to  guess right you earn bitcoins and get to  write the next page of Bitcoin  transactions on the blockchain here's a  more detailed breakdown of the mining  process once your mining computer comes  up with the right guess your mining  program determines which of the  currently pending transactions will be  grouped together into the next block of  transactions compiling this block  represents your moment of glory yes you  have now become the temporary banker of  Bitcoin who gets to update the Bitcoin  transaction ledger known as the  blockchain the block you've created  along with your solution is sent to the  whole network so that other computers  can validate it each computer that  validates your solution updates its copy  of the Bitcoin transaction ledger with  the transactions that  you chose to include in the next block  as you can imagine since mining is based  on a form of guessing for each block a  different miner will guess the number  and be granted the right to update the  blockchain of course the miners with  more computing power will succeed more  often but due to the laws of statistical  probability it is highly unlikely that  the same miner will do so every time  after this stage is complete the system  generates a fixed amount of bitcoins and  rewards them to you as a compensation  for the time and energy you spent in  solving the math problem additionally  you get paid any transaction fees that  were attached to the transactions you  inserted into this block  so that's Bitcoin mining in a nutshell  it's called mining because of the fact  that this process helps mine new  bitcoins from the system but if you  think about it the mining part is just a  byproduct of the transaction  verification process so the name is a  bit misleading since the main goal of  mining is to maintain the ledger  

(2) What is Mining Difficulty ?

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now that you know what Bitcoin mining is you might be thinking cool free money so where do I sign up well not so fast Satoshi Nakamoto who invented Bitcoin crafted the rules for mining in a way that the more mining power the network has the harder it is to guess the answer to the mining math problem so the difficulty of the mining process is  actually self adjusting to the accumulated mining power the network possesses if more miners join it will get harder to solve the problem if many of them drop off it will get easier and this is known as the mining difficulty so why on earth did Satoshi do this well he wanted to create a steady flow of new bitcoins to the system in a sense this was done to keep inflation in check the mining difficulty is set so that on average a new block will be added every 10 minutes now remember this is on average we can have two blocks being added minute after minute and then wait an hour for the next block in the long run though this will even out to ten minutes on average as you can imaginethis type of self adjusting mechanism  created some sort of an arms race to get the most efficient and powerful miners as soon as possible when Bitcoin first started out there weren't a lot of miners out there in fact Satoshi the inventor of Bitcoin and his friend Hal fitty were some of the very few people mining Bitcoin back at the time with their own personal computer using your CPU meaning your central processing unit or your computer's brain was enough for mining Bitcoin back in 2009 since the mining difficulty was low

(3) What are the challenges for crypto currency miners ?

1  electricity consumption

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this one is the most easy one so all the miners they need electricity propose for computers unit electricity and when a when they are running for 24 hours and 7 days of the week then you need a lot of electricity and let me tell you it's not just one machine like not just a PC But you are running so many machines at the same time of course it will take electricity and in this case a lot of it and in many countries electricity is not cheapIf you are running you are machine for mining it will take a lot of electricity in that case you will get a huge amount of electricity bill so that's a challenge that all the miners have to face 

2 over heating of systems

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 with the first pointed I made so if your computer is running for 24 hours and 7 days of the week then there are a lot of chances that it will overheat because not everyone have the facilities to put an air condition in the room or wherever you are storing your mining Rig and countries like us in all the Asian countries the weather is mostly heart like in Australia as well these are the countries with a lot of heat like if I give you a small example of mine whenever I am recording with my camera in summer times it overheats even my iPhone 6 you can say that it is a challenge 

3 Expensive hardware

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 now in case if you ever had any issue with any one of your hardware like in mining rags  GPU used are used  and let me tell you they are not cheap and as much as people are creating into cryptocurrency mining they are getting expensive day by day because first people use to only use this for gaming and just for regular things but now they are using this to make money of course that's why they are really expensive and if you ever last one you will have to spend some really good cash and that is a challenge

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