Cryptocurrencies hope to democratize finance and broaden access to financial products and services.
Cryptocurrency is a new type of money that exists only in digital form and is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Cryptocurrencies do not have a central issuing or regulating authority, instead using a decentralized system to record transactions, called blockchain - a distributed ledger enforced by a network of computers.
Mining is a critical component in the development and maintenance of the blockchain ledger. It is also the way the network confirms new transactions and prevents the double-spending of digital currency. And it is the process by which new cryptocurrency enters into circulation.
To complete the mining process, specialized computers have to solve difficult mathematical problems required to verify and record every new transaction and ensure that the blockchain is secure.
In the early days of Bitcoin, someone could run a mining program from their PC and create a significant number of coins. As the network grew and more people and groups got into mining, the algorithm for creating Bitcoin also grew in complexity. The system is designed to find a new "block" every 10 minutes. If there are millions of miners instead of thousands, then the difficulty must increase exponentially to reach that 10 minute goal. And those who successfully have added a new block to the blockchain are rewarded a degree of bitcoin.
The bitcoin reward that miners receive is an incentive that motivates people to assist in the primary purpose of mining: to legitimize and monitor Bitcoin transactions, ensuring their validity. The system is programmed in such a way that every 4 years the reward for a new block created gets halved.
From 2008 until 2012 - the reward was 50 bitcoins
From 2012 until 2016 - 25 bitcoins
From 2016 until 2020 - 12.5 bitcoins
Since 2020 until 2024 - the reward is 6.25 bitcoins
From 2024 until 2028 – the reward will be 3.125 bitcoins
And this process will be continued until February 2140 when the last bitcoin will be created.
The downside to the mining process is the high energy consumption required to operate the mining equipment. There are, however, efforts to reduce this negative effect by seeking cleaner and green energy sources for mining operations such as solar energy or hydro energy.
Last week, the Women Do Crypto community had the chance to learn more about the mining industry and visualize a detailed overview of the mining process at Crypto Miners’ showroom. It was a wonderful experience to learn from the experts in the field, Ashar Siddiqui, Operation Specialist at Crypto Miners and Stella Kaczko, Business Development Manager, how the mining process operates, what are the benefits and challenges of miners and discover the current state of the mining industry and its regulations.
If you are looking to broaden your knowledge in the field of mining cryptocurrency, Crypto Miners is definitely the place to go. They provide turnkey solutions including procuring mining devices, consultancy, maintenance and repairing services, hosting mining facilities and much more. Recognized as the best crypto mining server provider in the GCC region at Expo 2020, Crypto Miners aims to encourage people to achieve excellence and exponential growth in the crypto mining industry.