Steemit Crypto Academy Contest / S9W5 - Cryptocurrency Mining
Assalamualaikum everyone.
Welcome to this post. I hope that all of you will be doing well and enjoying the time with the grace and blessings of Almighty Allah. It's the right time to be a part of the week 5 contest in our beloved SteemitCryptoAcademy community and the topic of discussion for this week is Cryptocurrency Mining. So, let's start the discussion without any wastage of time.
As we all know that mining is a process in which new items or resources are extracted from the soil or the natural monuments. We all are well aware that different real life resources like salt, oil, gold, coal and petroleum are extracted from the soil through the process of mining where the miners drought the soil and extract the respective resource.
In the digital world, there is a term which is known as Cryptocurrency Mining in which the new cryptocurrencies are generated and added to previously existing supply of that cryptocurrency in the market. In this process, new cryptocurrencies are mined by the miners who are actually the block validators of that blockchain.
The miners are those individuals who solve the complex mathematical problems with the use of the high standard systems and high computational hardware devices. After solving those problems, the transactions are verified and hence those transactions are added to the blocks. When a particular block is filled, it is added to the previously generated blocks, hence creating the Blockchain.
The miners are rewarded in the form of the respective crypto tokens or coins as a reward of their efforts while generating the blocks. Being a miner is not an easy task, as I have said that it requires a lot of mining power which is gained through high expenditures of hardware devices and energy sources like electricity and internet as well.
The crypto tokens that are generated and distributed among the miners/block validators are called as the mining or block rewards. Bitcoin is the largest and the most popular cryptocurrency and it's new coins are also generated through mining process. The mining reward of the Bitcoin is decreasing day by day due to increase in inflation with the passage of time.
Yes, the Steem tokens can be mined. Just like the other cryptocurrencies, Steem tokens are also mined thorough the process of the block validation. But the block validation process of the Steem ecosystem is very much different from many othet blockchains. The Steem blockchain is based on the Delegated Proof of Stake (DPoS) consensus protocol.
Steem tokens can only be mined by the top 21 (20+1) witnesses of the Steem blockchain. These witnesses are selected by the stakeholders of the platform through the witness voting. The more the staking of a user, the more will be his witness vote's worth. These Steem witnesses validate the transactions and generate the blocks in the ecosystem.
On the creation of every block, around 3.1 new Steem tokens are generated and distributed to the top witnesses. Every new block is generated in 3 seconds and thus 20 blocks are generated in a minute. The block reward of the Steem blockchain is also reducing day by day due to the increase in the inflation of the Steem tokens. It would be difficult to mine Steem tokens in future because block reward will reduce.
As I have already discussed that the cryptocurrency mining actually involves the validation of the transactions that are proceeded in the blockchain. There are different consensus protocols that are used by different blockchain networks for the block validation. Some of the common methods of mining cryptocurrencies are as follows.
Proof of Work is the most ancient method of block validation. In this process, the block validators are called miners. The minors have to solve the complex mathematical problems to verify the transactions and hence they are regarded with the newly generated tokens. The more the computational power a miner have, the more will be chances of that miner to validate the transaction first and get more mining rewards.
To overcome the problems of PoW, many other consensus protocols are introduced. Proof of Stake is one of them. In PoS, the block validators are selected on the basis of their staked amount on the platform. The more will be the staking of a user on the platform, the more will be the chances of that user to be the block validator. The selected validators are rewarded with the mining rewards after the blocks validation.
It is the consensus protocol which is used by the Steem blockchain. In this type, the top 21 witnesses are responsible of validating the transactions and they are selected by the stakeholders of the platform through witness voting. When a new block is produced, it generate the mining rewards which is distributed among the top witnesses of the platform.
In this type, the mining rewards are generated by the burning of tokens. The miners are those identities who contribute towards the ecosystem's growth by sending the tokens to the dead or null wallets which are not accessible by anyone. Those users are rewarded with the new tokens.
There are many other consensus protocols which are introduced in the blockchain world with the passage of time. New protocols are introduced to overcome the drawbacks of the previous protocols.
To be honest, I have never been involved in the cryptocurrency mining. Although, I have tried many times to start the mining of different crypto tokens but couldn't. I have explored many clouds mining platforms in this regard but I have never started mining so far.
However, there are some friends of mine who are involved in the crypto mining. They said that they are mining Bitcoin and I have also visited their mining setup and have seen the mining rigs that they have installed. It is obvious that the expenses are very much high and electricity consumption is also high. That's why, I didn't start mining so far.
There are number of important benefits that are possible because of mining. Some of them are listed below.
The most important advantage of cryptocurrency mining is the validation of transactions that are carried out in the particular blockchain. The validation of the transactions is very much important to ensure that there is no double spending of the digital assets.
Another important benefit of the cryptocurrency mining is that it improve the security of the blockchain. Because of the fact that there are many expensive requirements to mine the cryptocurrency so this thing can prevent the blockchain from the attacks of different scammers and fake people.
Another benefit of the mining is for the minors or the block validators because they are rewarded with the newly generated tokens in the return of their services that they do for the growth and development of that blockchain ecosystem. The new tokens are thus added to the existing circulating supply of the tokens in the market.
One of the most important benefits of cryptocurrency mining is that it ensure the decentralization of the blockchains by allowing all the users to be able to participate in the mining process. All of the users that are capable of affording all the expenses can participate in the mining process and generate the blocks.
As we all know that nothing is perfect in this world so the same is the case with the cryptocurrency mining. There are many challenges and drawbacks that are associated with the cryptocurrency mining. Some of them are discussed below.
One of the most important challenges of cryptocurrency mining is the high competition among the minors a that are present in the particular blockchain. There are number of miners who have to complete with the one another in order to get good returns from the block reward.
The volatility of the cryptocurrency market is an other challenge for the cryptocurrency miners because their net profitbility can never be predicted because of the fact that the value of that token or cryptocurrency is always fluctuate highly.
The regularoty of the cryptocurrency and adoption of crypto mining in many of the countries is also a very great challenge for the miners. If I would talk about my own country Pakistan, cryptocurrency mining is banned here and at the time of writing this post I received in notification that government has also banned the uses of cryptocurrency in our country.
Another important issue regarding the cryptocurrency mining is that it is also harmful for the surrounding environment because of the high heat that is released from the mining machines. That is why, cryptocurrency mining is banned in many of the countries of the world.
As I have already said that the highest computational power and mining power will win the race and will be allowed to control the transactions that are proceed in that blockchain so this my rise to a degree of decentralization in many of the cases where there are a few people who are controlling the whole blockchain.
The cryptocurrency mining is a process in which new cryptocurrency tokens aur coins are mind by the process of block validation. There are several methods of cryptocurrency mining and every type has its own requirement to become a validator verify the transactions to access the mining reward. Steem tokens can also be mind by the first 21 witnesses of the network. There are many benefits of crypto mining at the most important is that ensure the decentralization of the network. On the other hand there are several challenges and the most important is the high expenses needed to become a validator.
I would like to invite my friends @simonnwigwe, @malikusman1, @suboohi, @fantvwiki, @chasad75 and @frenyeligonzalez to take part in this contest.
Hola steemdoctor, sin duda el proceso de minado es costoso y por ejemplo aqui dentro de la plataforma las personas que estan como testigos invierten en ese proceso muchos recursos. Creo que Pakistan tiene muchas cosas en comun con Venezuela, las condiciones no estan dadas para la evolucion.
Espero que estas decisiones del gobierno no afecten en nada su vida dentro de la plataforma, o cualquier otra cosa referente a las cryptos con la que este relacionada.
Todos los puntos fueron abordados super bien. Gracias por compartir su explicacion con nosotros.
Yes, this thing will not affect my way to Steemit. These type of decisions are temporary and soon they will understand the importance of cryptos. Anyways, thanks for the beautiful comment.
TEAM 3
Congratulations! This post has been upvoted through steemcurator05 We support quality posts , good comments anywhere and any tags.Thank you so much for the great support dear @suboohi.
Hi friend!!
your publication is quite interesting and educational... I confess that at one point I wanted to look at bitcoin I thought it was something simpler but as you explain it here it is a very important but complex and expensive process.
I am so happy that we have a team of witnesses quite committed to the platform and that thanks to their work we can still continue to say that Steemit is decentralized
successes in the challenge and greetings in the distance.
Yes, Steem Witnesses are doing great for the betterment of the platform. Thanks for the beautiful comment friend 😊
Hello @steemdoctor1
You will find accurate information about cryptocurrency mining and its process, as well as the specific case of mining STEEM tokens. It properly explains the concept of mining in the digital world, highlighting the role of miners and the rewards they get for their efforts.
Also accurate is the description of STEEM mining through the Delegated Proof of Stake (DPoS) consensus protocol, emphasizing the selection of witnesses and the generation of block rewards by stakeholders.
You have enumerated a variety of mining methods for cryptocurrencies, including Proof of Work (PoW), Proof of Stake (PoS), Delegated Proof of Stake (DPoS), and Proof of Burn (PoB).
Provides a comprehensive overview of cryptocurrency mining, its various methods, benefits and challenges. You have presented an informative and accurate account of the topic.
Write:@mateen005
Thanks for such a nice comment and addition dear friend.
Hi @steemdoctor1, I hope you will be well and good. I have given a nice write up to the cryptocurrency mining topic.
You have defined cryptocurrency mining in a good way as well as it's working. Cryptocurrency mining is actually validating the transactions and producing the new blocks by solving the complex puzzles and mathematical equations.
Different blockchain networks uses different mining methods as bitcoin uses proof of work PoW consensus and steem blockchain uses delegated proof of stake.
Indeed there are a lot of benefits and importance of mining cannot be denied as it is necessary to prove the transparency of the blockchain and to place the transactions in the blockchain ledger.
There are many challenges regarding the cryptocurrency mining and it is not an easy job. It needs a lot expenses and energy to mine. And market volatility affects mining the most.
On the whole you have tried to explain in a good way keep up the good work. Please have a look at my post. Thanks!
Thank you so much for the nice compliments brother.
Sure, I will visit your post soon!
Por favor @mohammadfaisal no realice este tipo de mensajes. Estas copiendo y pegando este mensaje en diferentes publicaciones. Esto puede ser penalizado y si sigues con esta práctica tu cuenta será silenciada.
Muchas gracias y saludos
Asalam Alikum brother
Umeed ha ap khariyat sy hngy. Mjhy invite krny k lye bht shukriya. Me is contest me hisa ln ga agr meri tbyt thk hogai. Aj b bht mushkil sy me ne article likha.
Me hamesa sy cryptomining seekhna chahta hn lkn koi b thk sy guide ni krta kitna hardware chahye kn sa software use hoga, hardware kn sa best hota ha jo expensive b na ho zyada.
Ap ka article parh k kafi information mili ha but still mjhy bht knowledge ki need ha bcoz ye bari investment wala kam ha.
Hamesha ki tarhan ap ne bht acha content publish kia ha. Hmry st apni knowledge share krny ka bht shukriya brother. Meri duaen ap k st hain Allah Pak apko kamyabi dy Ameen.
Regards,
@chasad75
Apki keemati tabsary ka bohat shukria brother. Mjy bhi crypto mining k related practically ziada info ni hai warna me zror share krta. Salam!
Good
JazakAllah brother 💕 💕
You provide a good overview of the concept of mining in different contexts ,both In natural resource mining and Cryptocurrency mining.
Mining in the context of natural resources does refer to the process of extracting goods or resources from the earth. It involves activities such as drilling, quarrying and processing To obtain resources such as salt, oil, gold ,coal and petroleum. This mining has an environmental impact and requires attention to sustainability and the negative effects that may arise.
In the digital world, cryptocurrency mining is a process that takes place on the blockchain, which is the underlying technology for digital currencies like Bitcoin. In cryptocurrency mining, miners use computing power To validate transactions and create new blocks in the blockchain. They solve complex mathematical puzzles to verify transactions and receive rewards in the form of cryptocurrency In return for their contribution. This mining process is important for maintaining the integrity and security of the blockchain as well as for augmenting the existing supply of cryptocurrencies.
Good luck.
Thanks a lot for your precious addition here.
Your insights about Cryptocurrency Mining is very clear. Indeed ! Mining plays an vital role in the world of Digital Cryptocurrencie. You have given an overview that how it's work. Yes , miners play an important role in operation of mining. There are mathematical puzzles that miners have to find out a valid solution..when yeh succeed to meet the specific criteria then they get reward by their contribution. They are rewarded by specific amount of newly minded coins.
Stake holders play a vital role in achieving steem tokens. Becuse steem is not mined traditionally. You have provide a very clear significance of mining and giving some benefits. No doubt mining rigs , and electricity costs are hurdles and there are still some legal Restrictions that mining has to face. Overall you have presented a very good post about the concept of mining. Good luck for the contest.
Thanks a lot for such a nice comment 🙂