What is Mining (Blockchain)
Definition
- To understand what mining are in cryptocurrency, we need to understand one of the main consensus mechanism that exist in a blockchain network which is the Proof of Work (PoW) mechanism.
- PoW is a validation tool that were use to validate any type of transaction that happen inside a blockchain network. All blockchain network that use the PoW mechanism require a lot of miner to operate properly.
- Miner will mine a certain crypto as a way of validating a certain cryptocurrency hence the term mining. Check this article here for know more about mining.
- Mining require a lot of energy and investment especially on the mining tool purchase. Other than that, if you put your investment on the wrong mining tool, it can end up costing you more than what you already invested on.
Different Types of Mining
- There are several types or way of mining cryptocurrency. Some types or way of mining might no be listed here because of lack of information.
CPU Mining
- This is one of the simplest way to mine a cryptocurrency. Any computer (even your phone) that contain a Central Processing Unit (CPU) can be use in mining cryptocurrency. But it is not really profitable because CPU is not as efficient as a GPU or ASIC. The increasing difficulty in mining process also make some people avoid CPU mining.
- CPU such as AMD Ryzzen 9 3900X with a high efficiency and solid perfomance is still a popular choise among miner. But, high performance CPU can still cost a lot money.
GPU Mining
- Graphic Processing Unit (GPU) mining is a way more popular and common choise among miner because it can perform better in mining than CPU. But, the cost of buying a GPU mostly double the cost of CPU because GPU was created to process a more demanding task for a computer.
- Some of the most popular GPU that were use in mining is NVIDIA GeForce RTX 3080 and AMD Radeon RX 6800 XT. A little fun fact, some gamers hates miner that use GPU to mines crypto because most serious miner will buy a lot of GPU and leaving gamers not being able to buy a GPU to upgrade their gaming setup.
FPGA Mining
- Field-programmable Gate Array (FPGA) is a reprogrammable chips that can be customized for specific task (the chip program can be change based on what think you want to do). It can be used to mine various cryptocurrency because of its reprogrammable feature. But, it has some efficiency issues.
- Some of the most popular FPGA that were used in mining cryptocurrency are Intel Cyclone 10 FPGA and Lattice ECP5 FPGA.
Cloud Mining
- Cloud mining is a way for people to mines a cryptocurrency without owning any mining setup. It involves renting a mining hardware from a provider. When the renting process is done, the mining process will start and any crypto that was successfully mined will be directly transfered to your crypto wallet. Cloud mining is not really highly profitable because you need to pay fee for the provider.
- Some popular example of Cloud mining provider is Genesis Mining and MinerGate.
ASIC Mining
- Application Specific Integrated Circuit (ASIC) a specialize chip that was design only for mining cryptocurrency. It is the most powerful mining setup for a miner and most large scale crypto mining activity will use ASIC for their mining setup.
- Some example of the most popular ASIC that were use for mining are Bitmain Antminer S19 XP Hyd and MicroBT Whatsminer M50S.
USB Mining
- Universal Serial Bus (USB) mining is a cryptocurrency mining that use a USB miner as a mining setup. USB mining doesn’t require a lot of energy but it also one af the least profitable way of mining. USB mining is also a great way for beginner to start mining cryptocurrency.
- Some of the most popular example of USB miner is GekkoScience NewPac 130Gh/s+ USB Bitcoin Miner and Compass Miner X6-S.
Thanks for reading and as always keep learning about crypto everyday.
Follow and subscribe my other writing platform, What Crypto Newsletter. Also, I highly appreciate your support toward The Crypto Archives and if you want to show me more support, buy me a Crypto Coin using the link here🚀🚀🚀.
Feel free to read my other articles:
Affiliate Links
Start your cryptocurrency trading journey by joining OKX using this link here. OKX is the second largest cryptocurrency exchange platform in the world that provides a lot of different swap, derivative and other related stuff to crypto trading. OKX exchange platforms also is users friendly for any crypto trader ranging from beginners to a professional. (Not available in some countries and the USA.)
Keep having trouble sleeping because of having a bad dream about your crypto wallet safety? Try to store your cryptocurrencies inside one of TREZOR hardware wallet. Use the link here to browse their product and buy one of their hardware wallet. Then, go back to sleep and let TREZOR hardware wallet do their job.
(DISCLOSURE: This article contain affiliates and referral link for a certain cryptocurrency product or exchanges. This article also is not a financial advice and only for educational purpose.)
