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    Home » How does crypto mining work? The role of mining cryptocurrency for business and society

    How does crypto mining work? The role of mining cryptocurrency for business and society

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    By BlockchainJournal on April 4, 2019 News
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    Mining cryptocurrency often falls into the headlines of popular media, mainly because of the energy consumed in this process. A recent study conducted by the science journal Nature Sustainability claims that crypto-mining consumes more energy than mining with the same market value.

    But this is not entirely true, crypto-mining has its advantages, which in the long run can be useful for society. Let's figure it out.

    How does crypto mining work?

    In fact, the cryptocurrency is not regulated by the government or the bank. Transactions are stored in blocks that are interconnected, forming a single blockchain . To verify and authorize these transactions, it is necessary to solve complex mathematical equations.

    This whole process of solving complex algorithms is called mining. Crypto miners solve algorithms, getting a reward in the form of cryptocurrency.

    Advantages of mining cryptocurrency

    • Free schedule : crypto-mining can be a profitable process if you approach it carefully and organize your work properly. Most often miners are not loaded during the working day, since special programs monitor the functioning of the equipment. But they constantly calculate the costs and profits. The best option is cloud mining , which would ultimately minimize the degree of their participation and follow only the charges.
    • A reliable way to get coins : central banks issue the traditional currency – the euro or the dollar, cryptocurrency is significantly different from them. Miners can mine cryptocurrencies and receive coins based on the issue rate set in the code, and they cannot fool the system or create a cryptocurrency from the air. They will have to use their computing power to generate cryptocurrencies, as a result they receive a deserved reward in the form of coins.
    • Profitability : compared to buying cryptocurrency , mining is more profitable. Of course, the initial costs associated with mining are high, this is due to the high cost of mining equipment, the subsequent costs are much less. If done correctly, mining can be cheaper and more efficient than buying cryptocurrencies, especially when using cloud mining services .
    • Enhanced security . As more and more people show interest in cryptocurrencies and start using them, this directly affects the security level of blockchains. As the number of crypto miners increases, the network's hashrate grows, making it less vulnerable to cyber attacks. This is due to the fact that cybercriminals need to control more than half of the network’s power in order to affect its operation. In general, crypto mining provides network stability.
    • Social engineering : you may not have expected it, but crypto-mining can be used for social engineering. There are various companies that study the use of transaction verification mechanisms. Thus, mining nodes can be used to study large amounts of data created in the process of crypto-mining. These forecasts and conclusions may be useful for health care, logistics, manufacturing, and other industries.

    Conclusion

    Next time, when someone says that crypto-mining is destroying the planet, tell him about these advantages, and also that huge amounts of energy costs are very controversial. Moreover, according to the Coinshares report, 78% of Bitcoin miners use renewable energy sources.

    Currently, a lot of work is being done in this direction – Intel recently won a patent for energy-efficient mining of bitcoins . In this regard, we can conclude that the mining cryptocurrency is gradually moving towards energy saving and finds alternative, more economical options.

    Publication date 03/04/2019
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