Steemit Crypto Academy Lesson 4/Introduction to Cryptocurrency Mining/ Explaining Cryptocurrency Mining In Simple Terms.
What is cryptocurrency mining?
I will be explaining this term using the traditional banking system that we all know about as an example, this method of traditional banking usually has a central head with which every transaction carried out must be recorded and confirmed, these central heads is what we usually regard as the central banks in each country.
Now back to the blockchain which does not operate in a centralized way. The blockchain system has no central head at all, it simply just distributes its block tokens on different blocks where the miners are the ones who get to use their computers to estimate cryptographic calculations.
One other thing that is worthy of mention is the fact that the confirmed transactions carried out by traditional banks is usually not displayed for the public, only some certified organizations are allowed to monitor these transactions but for the blockchain, transactions are made available for the public.
What are the difficulties associated with mining?
Almost nothing is the same as what we use to have back in the day, things have changed seriously and with time things keep changing, back in 2008 it was possible to mine bitcoin with a mobile device but things are different now and an average person who wants to mine bitcoin must have certain sophisticated industrial instruments to start and we are talking about making investment in millions.
The more sophisticated and fast instruments you have for the job, the more you are able to mine and this means more rewards for you as well, it will however be discouraging for a miner who has no instrument in place to meet the required target.
What are the major problems that cryptocurrency miners face?
To become a successful cryptocurrency miner might be desiring but the problem of energy consumption has always persisted. In order to maintain the high energy for the task, a huge amount of energy needs to be consumed which means a high cost also.
Another problem that have persisted is miners getting their system hacked on a constant base.
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Hello @eni-ola ,
Thank you for submitting homework task 4 !
Yes , you have identified the major challenge for miners. It's the cost for electricity. You have discussed the topic clearly with facts. nice work [6]
Thank you