Steemit Crypto Academy Contest / S9W5 - "Cryptocurrency Mining"

Hello everyone, it is good to be a part of the Steemit Crypto Academy Contest Season 9 Week 5. This week I'll be writing on Cryptocurrency Mining, so join me as I embark on the journey, I hope you enjoy as you read.

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What is cryptocurrency mining and How it works?

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On every blockchain, information or data are stored in their ledger. This information cannot be tampered with but then, there needs to be a way of validating this information. Mining is a way of validating transactions on a blockchain via nodes. This validation is done on each block where several computation power is used to solve complex mathematical problems allowing for transparency, decentralization, and integrity. If I were to look at Proof of work, ming requires computational power where different nodes fight to solve mathematical puzzles in other to find the hash value of the blocks being mined. In recent times, hardware such as ASICs, GPUs, FPGAs, and so on are used. When it comes to proof of stake, it has to do with holding a certain amount of the cryptocurrency which will then qualify for running a node which would then be used to validate the transaction while creating new coins.

Can STEEM token be mined?

STEEM is the native coin of the Steem blockchain and unlike Bitcoin and Ethereum, it doesn't use the Proof of Work and Proof of Stake respectively. It uses the Delegated Proof of Stake (DPoS) Algorithm. Unlike mining Bitcoin, it doesn't require large hardware with high computation powers to solve mathematical complexes, rather it uses a system of verification where 21 witnesses are voted in and allowed to verify transactions.

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The voting for witnesses is done by stakeholders who have the STEEM Token powered up, and the witnesses would be responsible for the production and the validation of blocks on the chain. They will also be responsible for publishing price feeds for STEEM/USD. Anyone can run a node to become a witness and start to validate transactions, produce blocks and validate the blocks. STEEM tokens can be gotten as rewards for becoming a witness if validation of blocks in the chain occurs.

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Name The various types of mining methods for cryptocurrency

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The types of mining methods depend on the consensus mechanism and algorithm of the chain. These methods are;

• Proof of work (PoW)
• Proof of stake (PoS)
• Delegated proof of Stake (DPoS)
• Proof of capacity (PoC)
• Proof of burn (PoB)
• Hybrid Proof of Activity (PoA)
• The Proof of Elapsed Time (PoET)
• Proof of Authority (PoA)

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

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I have never been involved in cryptocurrency mining. I am still relatively new to cryptocurrency, although I have been learning very fast. Sometime last month, I bought a GPU so I can be able to mine coins like Monero but I haven't tried it out. I do not intend to do it for the profit of it, I just want to give it a try.

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Give some of the Importance and benefits of cryptocurrency mining

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• Validation of Block:Cryptocurrency mining is important for the blockchain as it allows for the validation of information and blocks on the blockchain.

• Security: The fact that it is being validated by several nodes makes it hackproof, thereby ensuring that it is secure.

• New Coin Creation: Mining helps to create new coins which would be added to the circulating supply of the coin. The miners are also incentivized as they are paid miners' fees for their contribution to the blockchain. Some coins such as the Bitcoin would not produce new coins again in the future when its total circulating supply is reached.

• Decentralization Mining serves as proof and confirmation that the chain is decentralized as anyone can become a miner and start to verify blocks.

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Name some of the challenges of cryptocurrency mining

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• Mining Difficulty This is one problem of mining. The more nodes that are running to solve the arithmetical problems, the more competitive the mining process is and this would require miners to keep increasing their mining power by purchasing more powerful hardware regularly which could mean not making a profit when expected.

• Pollution: This has been confirmed especially with Bitcoin. It is believed to cause noise pollution and cause some environmental problems. This had led to several government aging against Mining in their country especially when it is Bitcoin.

• Consumption of Energy: Mining hardwares are very powerful and they consume a lot of electricity. This is another reason why a lot of government has banned the mining of cryptocurrency in their countries.

• Regulations: While trading cryptocurrency comes with numerous government regulations, mining also does the same. A lot of crypto miners who have invested money, energy and time into mining usually close their mining farms as a result of regulations by government which prevents them from mining efficiently.

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With this, I have come to the end of my post, and I will like to invite @preye2, @inspiracion, @simonnwigwe, and @pelon53

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here is the link to my Introduction post