Homework 4 : Cryptocurrency Mining, Mining Difficulty and challenges by @yolimarag.
I hope you are well, in this post, I want to submit my assignment 4 that I have done as required by professor @besticofinder , cryptocurrency professor in #SteemitCryptoAcademy Community course where we are asked to explain the following points:
(1) How does cryptocurrency mining work?
(2) What is mining difficulty?
(3) What are the challenges for cryptocurrency miners?
How does cryptocurrency mining work?
It is the process of keeping the blockchain data under control. It involves hard work (performed by computers) and results in a slow accumulation of resources.
The term cryptographic mining means obtaining cryptocurrencies by solving cryptographic equations using computers. This process involves validating blocks of data and adding transaction records to a public record (ledger) known as blockchain.
What these computers do is launch a series of possible solutions, until the proposed solution matches the hash value of the block.
It is not stored in traditional banks as it is a decentralized system. Unlike the traditional (centralized) banking system, anyone can connect directly and participate in the cryptocurrency "system". You can send and receive payments without going through a central bank. That is why it is called a decentralized digital currency. It is also a distributed system, this means that the record (ledger) of all transactions is publicly available and stored on many different computers.
Cryptocurrency uses cryptographic algorithms to verify transactions. Miners use their computers to perform the cryptographic work necessary to add new transactions to the ledger. In return, they themselves get a small amount of cryptocurrency.
What is mining difficulty?
Mining difficulty is a unit of measurement used in the mining process of any cryptocurrency asset and a certain amount of resources is required to compete for mining assets. The difficulty is directly related to the total computational power estimated in the total hash rate, which is measured in TH/s, that is why depending on the speed in TH/s of a machine it will be able to find the fastest Hash value.
Example of mining difficulty
The above is roughly the algorithmic process that occurs within Bitcoin. But how can we simply see the concept of mining difficulty? The answer lies in the lottery. Let's imagine for a moment the following:
We are participating in a lottery where there are 100 billion participants. The large basket of numbered balls has the same number of balls with a hash noted on each ball. The lottery tickets have these hashes and the only way to win is to have a ticket with a number immediately below the lottery search target.
If luck is not on our side, we will have to draw many of these numbered balls in order to win. That is to say, the lower the target, the higher the difficulty and the more time we will have to spend drawing numbered balls until we find the winner.
How is it calculated?
The above has surely amazed us and has led us to wonder how to calculate the mining difficulty? Well, this value can be obtained with the following formulation:
difficulty = difficulty_1_target / current_target
In this case, the data means the following:
- current_target refers to a 256-bit number which is the current target of the network.
- difficulty_1_target, is a value given by a hash where the initial 32 bits are zero and the rest is one.
What are the challenges for cryptocurrency miners?
- Criminal risk by a hacker
- Risk that they want to control and regulate these activities, prohibit it and combat its use.
- High energy costs, depending on the country.
In conclusion:
The mining process is very simple,what is needed is a computer with high TH/s levels to find the fastest block Hash value since the more TH/s the faster the mining speed and the process becomes a bit faster.
This does not mean that a computer with a TH,/s for example of 4 does not mine, it does but its process is slower.
The accumulation in any case is slow, it happens day by day and can be seen in a pool system that shows us the daily statistics of what the computer has mined, and all this depends on an electrical connection and internet.
For a country like Venezuela, which is the country where I live, the difficulties for the miners are the electrical energy that fails continuously as well as the internet service, although this has not prevented the mining processes. On the other hand, lately there are rumors of regulation of electric energy for miners.
Thank you @crypto-academy and @besticofinder for the opportunity to be able to gain more knowledge regarding cryptocurrencies.
Cc:
@steemitblog
@besticofinder
@steemcurator01
@steemcurator02
Translated with www.DeepL.com/Translator (free version)
Hello @yolimarag ,
Some parts of your article is with plagiarism.
Ex :
Please write your own idea in your own words [0]
Thank you
Professor, excuse me, I have already adjusted the content and I have placed my personal conclusions. I would appreciate if you could check again, thank you very much and again sorry.