What Is Cryptocurrency Mining?
Cryptocurrency mining is the name given to the addition of new blocks to the blockchain system and the contribution of users to the system by solving crypto puzzles. Users who perform this operation are rewarded with some cryptocurrencies. In addition, users use some devices with different technical and hardware features during cryptocurrency mining.
For a cryptocurrency chain to be formed, some system information must be added. To encrypt the data in the blockchain, some puzzles need to be solved. Every user who supports the blockchain network and secures the distribution of information over the internet is rewarded with cryptocurrency.
Virtual wallet applications allow cryptocurrency transfers between users. However, these transfers are collected in a pool before they are approved. For cryptocurrencies to be transferred to virtual wallet applications, transfer transactions must be approved. Mining users who verify transactions are rewarded for contributing to the blockchain network.
What are the Types of Cryptocurrency Mining?
Cryptocurrency mining can be divided into 3 different types in general. These are listed as individual mining, batch mining, and cloud mining, respectively. Each of them is transactions performed by users that contribute to the blockchain network. Cryptocurrencies are distributed as a reward for each of these mining operations. We have examined these three different cryptocurrency mining systems that you can experience for yourself.
- Individual Mining
This mining system is a mining application that does not require collective participation and is carried out by people with their equipment. All coins earned in this system belong to the individual. The equipment power is very important to be able to decrypt passwords during individual mining operations. For this reason, people should purchase powerful equipment before starting individual mining operations. In this way, they can provide full efficiency from the mining operations they perform.
- Batch Mining
Batch mining operations are the system in which the miners act collectively. A common network can also be given the name that enables the development of new block systems. Cryptocurrencies received as rewards are divided among the miners according to their share. The importance of batch mining operations is increasing day by day as the encryption systems in blockchain networks are getting more difficult day by day.
- Cloud Mining
This system is based on the use of processing power by a company providing mining services, as opposed to using their systems. Users rent some equipment from these companies to mine. In this way, you do not need to buy your equipment or do regular maintenance of the equipment. However, you have to make a certain payment every month to the company that uses their equipment. In this way, you can continue mining cryptocurrencies without investing.
What Are the Mining Types by Equipment?
Mining types are also divided into 3 groups according to the equipment. These are ASIC-based mining, CPU-based mining, and GPU-based mining. Each is studied separately from the other in terms of power and cryptocurrency transactions.
- ASIC-Based Mining
It is known as the most powerful mining method. ASIC mining also includes many computational features. There are special hardware and software developed for this mining process. Cryptocurrencies with complex calculation processes such as Litecoin and Bitcoin are preferred for ASIC-based mining.
- CPU-Based Mining
CPU systems can be used during mining operations. To be able to mine with the CPU, some special software must be installed on the computers. High computing power is not required during this mining process. Therefore, cryptocurrencies will also be few.
- GPU-Based Mining
People can easily mine with a powerful graphics card. This mining system, also called GPU mining, is based on solving complex problems with graphics cards in computers. Because graphics cards are more powerful for mining than CPUs, they can process more operations per second.