In order to fully understand crypto mining, we need to gain a background in cryptocurrency. The original cryptocurrency, known as Bitcoin, was launched on January 3rd, 2009. Cryptocurrencies rely on blockchain technology which is why Bitcoin had a block number of zero.
Block numbers are important in cryptocurrency; they are a fixed number of encrypted transactions that when approved are added to the chain of blocks creating a blockchain. The software has mined Bitcoin and now anyone can use it, this is why more cryptocurrencies have been created from the original Bitcoin source.
Bitcoin transactions can only be accessed by using public or private encryption key technology. However, since the popularity of cryptocurrency has increased and the technological development has led to the need for crypto exchanges hosting leading to a world of crypto trading, making this platform grow even more.
Crypto Mining Strategies
Firstly, mining is a complex process that requires efficient computers with quick processing units in order to complete the verifications and calculations of the blockchains, in order to add a new block. Miners only revive the transaction fee but this marketplace is very popular.
Some of the main mining strategies are listed below in detail:
1. What is GPU mining?
This is also known as Graphics Processing Unit mining and is when a personal computer is set up to do the complex calculations for cryptocurrency verifications. This process is very slow and not as effective now as it was when Bitcoin was first started. It is not as successful now as the cost of electricity to power these computers is increasing and can also be disruptive as the computers generate a lot of heat and noise which can be disturbing in a quiet environment.
2. What is ASIC mining?
This type of mining also known as Application-specific integrated circuit mining uses a special processing unit to mine a cryptocurrency such as Bitcoin. This is also done on a computer and needs sufficient electric and internet power and an effective soundproof area.
3. What is Pool mining?
Pool mining is an inclusive type of mining that involves individuals working together and forming larger groups to conduct mining and then split the profits with the people in the group.
Obviously, the gains will be smaller when sharing between a group however it allows mining to be done much quicker than usual as it is sometimes a long and time-consuming process, working with others will make this be done quicker. It also avoids making a huge commitment to mining when you only have a little part to do and can be less daunting and much easier to tackle when there are more people to help.
4. What is Cloud mining?
Since technology is developing every day, cloud mining is a newer and more advanced way of the mining as it eliminates the need for any mining equipment. It also allows you to check and control miners from virtual devices such as PC or smartphones and can easily make online transactions.