The cryptocurrency mining hardware market is booming. According to reports, the market is estimated to grow up to US$2.80 billion at a CAGR of 7% during the forecast period of 2020-2024. Crypto mining has been around for just a few years. The first crypto to be mined was Bitcoin; in 2009.
What is Crypto Mining?
Cryptocurrency mining refers to the procedure of gathering cryptocurrencies by solving cryptographic equations with the help of computers. This procedure includes adding data blocks and transaction records to a public ledger known as the blockchain. In technical terms, this process includes the use of computers and cryptographic processes to solve critical computer functions and record the data in a blockchain.
Crypto mining is expensive; yet rewarding. Several investors are attracted to crypto mining because the miners are remunerated with crypto tokens for their work.
What is Bitcoin Mining?
Bitcoin mining is the procedure by which new bitcoins are introduced into circulation by balancing the critical components of the blockchain ledger, simultaneously. It ensures that the blockchain is constantly updated with authorized transactions.
The primary goal for miners is to gain Bitcoin tokens as incentives. It motivates the workers to monitor the transactions and fulfil the basic purpose of mining. Bitcoin miners are present all over the world to regulate Bitcoin transactions since it is a decentralized currency and does not depend on central governments and banking institutions.
How Does Bitcoin Mining Work?
Miners function as auditors who verify the legitimacy of the Bitcoin transactions and balance the blockchain. The mining starts from the blockchain. In the Bitcoin network, the miners add individual blocks by solving complex mathematical problems.
The most important tool used to mine a Bitcoin is the specialized mining hardware called the specific integrated circuits, or ASICs. The procedure to understand mining is not difficult. Suppose an individual has a legitimate US$30 bill and a counterfeit of that same amount. If the individuals try to spend both the real and the counterfeit bills at the same time, the person regulating the transactions would understand that either of the bills is fake. A Bitcoin miner checks these transactions to ensure that the buyers are not illegally using the same Bitcoin twice.
After the miners have successfully verified 1 MB of Bitcoin transactions, they become eligible for the Bitcoin tokens incentive.
The following types of equipment are required for miners who want to mine their Bitcoins.
- GPU( Graphics Processing Unit)- GPUs are responsible for identifying graphics and implement them on the computer screen. They can divide complex tasks into simpler ones to increase the performance of the device. The viability of GPUs to be used for mining solely depends on the mining algorithm and difficulty.
- FGPA (field-programmable gate array)- This equipment can be programmed and reprogrammed to suit the miners’ requirements. They are cheaper than ASICs but are less efficient than that.
- ASIC (application-specific integrated circuit)- This equipment is specifically designed for crypto mining. It is expensive and less customizable but has high hash rates and energy consumption levels, which makes it the perfect option for Bitcoin mining.