Steemit Crypto Academy Contest / S9W5 - "Cryptocurrency Mining

What is cryptocurrency mining?

To mine cryptocurrency mean to record transactions on a blockchain network. An individual mines Cryptocurrency by using good computers as the mining devices to solve problems that are mathematically complex, which will verify the authenticity of transactions.

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Mining can involve allowing your computer, or other devices do a work for you which in return will be given a type of Cryptocurrency based on how much and how long you've mined.

It means securing networks and verifying their transactions in exchange for newly created coins and transaction fees.

How does it work? Can STEEM token be mined?

Different coins/tokens have different methods on how to mine them. These cryptocurrencies might have a mining technology different from others same for other cryptocurrencies.

Let me use pi coin mining for us as an example.
We all know the pi coin?? It method of mining is one of the simplest and that's why I'm using it in my example. Pi network hasn't been officially launched or entered the mainnet yet. Users have been mining the coin for the past four years, with it mining rate reducing.

This mining here shows you all how a simple token or coin can be massively accumulated before it is officially launched.

This mining method involves just the user's phone or other devices, with the mining app installed on the phone. As part of mining, the users are required to log in daily and tap on the mining option to initiate their daily mining.

This will allow the app use just small percentage of the phone's energy in accumulating the coin in the process of mining it.

STEEM MINING

Based on how the steem token can be mined, it basically operates on a mechanism called Delegated proof of stake(DPoS). Unlike the explanation I did on pi network mining, in DPoS, users gets to accumulate set token such as steem, give... etc by selecting some curators accounts who will be responsible for validating of transactions on the platform and security the network.

There's one way of mining steem, through "proof of brain" process. This process involves users to create and curate contents, engaging and doing some tasks on the platform to earn the steem token. Instead of doing the normal way of mining, here the users get rewarded for what they contributes to the platform.

So with this now, users have to be good in what they do on the platform. It might be pure writing or contents full of arts, which ever way, all users are required to be creative and good in what they do on the platform to enable them earn the steem token.

Name The various types of mining methods for cryptocurrency

These are some of the mining methods below

1. PoW: The PoW means Proof of Work, which is a common mining method done by bitcoin miners. Here you'll be solving some mathematical problems, making use of computational power. Anyone who finishes first gets rewarded

2. Proof of Stake: Here it doesn't fully rely on how fast a user can solve a mathematical puzzle. To determine the mining power of a user, you have to hold some amount of coins. If the miner is holding more coin on the platform, the more chances the miner has to be chosen for validations and rewards.
   
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3. Delegated Proof of Stake: On this type of mining process, users get reward by means of voting by the platform's delegates. The delegates are responsible for curating and rewarding users based on their contribution to the platform.

4. Proof of Capacity: Based on this logic, the PoC uses the capacity of a miner's space to allocate some certain challenge that will earn them some good rewards. This capacity is based on the one the miner's computer or harddrive holds.

5. Proof of Authority: Here you need to have authority before you can be able to validate transactions on the platform. The network choose a limited number of validators, trusted ones that will be responsible for all transactions and reward allocations on the platform. The validators are chosen on the platform based on their reputation or authority.

6. Proof of Burn: When you burn some certain amount of coins here, you will be able to mine new ones. As a user, when you destroy some certain amount of coins, you'll be given the right to get and mine new ones.

These are some of the few methods I know.

Have you ever been involved in cryptocurrency mining? If yes can you share with us how you mined this coin?

Yess, I have been mining some pi coins for some time now and the process is pretty much cool and simple. All I have to do is to open my pi network app after 24 hrs and click on the mining tab to start mining the coin.

*My pi network account.

I also mine the omega coin, which has the same mining processes as the pi coin.

Give some of the Importance and benefits of cryptocurrency mining

1. Transaction Verification and Security: Cryptocurrency mining has a high security rate. All transactions are well verified and the Cryptocurrency of each user mined will be secured.

2. Decentralization: Most mining networks depends fully on decentralisation. Cryptocurrency itself speaks of desensitisation, and so the mining technology too. Rather than just depending and relying on some set of authorities, Miners are allowed to contribute to the operation and security of the network.

3. Creation of New Coins: Another importance here is the fact that it is through mining we get to create new cryptocurrencies. So when you get rewarded as a miner, you bring in new minted coins to circulation.

4. Financial Rewards: Mining is a good way of liberating yourself through financial rewards. Let's take example, the pi network coin that we have been mining for years now, if it launches and the value increases, lots of people will step out of the poverty zone and start up a new life.

5. Network Stability and Consensus: The mining process helps maintain the stability and consensus of the blockchain network. Miners compete to solve complex puzzles, and once a solution is found and verified, consensus is reached on the next block of transactions. This consensus mechanism ensures that all participants agree on the state of the blockchain.

Name some of the challenges of cryptocurrency mining

1. Energy consumption: Most mining methods, especially the proof of Work needs lots of energy to be able to initiate mining processes.

2. As more mining networks gains more miners, then the level of difficulty increases. This will make it very difficult to get rewarded by solving mathematical problems, and also requires more of the computational power and resources.

3. Centralization of Mining Power: This is one of the things that makes it difficult for people to gain while mining because mining has become a centralised thing in some cryptocurrencies. By so doing, the risk will be high on the platform if the power holders are set if wrong people.

4. Volatility and Market Conditions:
   When you mine a certain type of Cryptocurrency, you should be rest assure that you will face some challenges as high volatility. If the Cryptocurrency you're mining has high fluctuations, then you just have to endure whatsoever value it gives you at the cause of mining.

5. Technological Obsolescence:
   This talks about the constant upgrade we get from mining networks. The technology is evolving... As the years passed by, we get to see new methods of mining that won't be any easier than the previous ones. This will come up with a new way that will definitely be harder to earn cryptocurrencies.

Thanks for reading my post to the end....

More successes and growth to the steemit platform 🚀🚀🚀🚀

I'm inviting @lilbiz-yl, @josepha and @five5 to join the challenge