Recently, the E World Holdings’ team became increasingly involved and invested in the world of cryptocurrencies. Yes, we said, world, because while it offers a world of opportunity, it also requires a world of understanding, research, and knowledge. Like any new technology or development, it’s nuanced, and in a lot of ways, you have to learn from mistakes and gaps in the system as you go. Buying into cryptocurrency is the common and more obvious approach. You purchase the coins then give them time to appreciate, which paid off handsomely for some over the past decade. This approach is also highly publicized making it easier for people to understand how to invest in this way and best tactics for doing so.
Having said that, the first step in reaping the crypto rewards is understanding where this digital money comes from. Enter mining. In order to access cryptocurrency, it needs to be mined. Mining is less frequently discussed due to the slower payoffs and typically more limited opportunity without a wealth of understanding. As Adam Shepherd simply explains, “As there is no central authority or central bank, there has to be a way of gathering every transaction carried out with a cryptocurrency in order to create a new block. Network nodes that carry out this task called dubbed ‘miners’. Every time a slew of transactions is amassed into a block, this is appended to the blockchain. Whoever appends the block gets rewarded with some of that cryptocurrency.”
Doesn’t mining defeat crypto principals?
Since mining links to a ‘user profile’ in order to arrange payment, people often misunderstand and assume that in turn, it’s traceable. Security always remains the main pillar of the technology and so even while mining rewards miners, it still maintains anonymity. As Jason Evangelho says, “Since these blocks are heavily encrypted, they’re sort of like complicated math puzzles that only powerful compute-capable hardware can solve. Enter your CPU, or your Radeon and GeForce graphics cards. The process of solving the math puzzles on these blocks and adding them to the public blockchain (think of it as a ledger) is roughy what mining is.”
Mining cryptocoins typically acts more like a hobby than a sole income (unless you are an early adopter with a tech background and a strong infrastructure.) For blockchain and crypto enthusiasts, it’s an opportunity to partake and support the technology they enjoy so much. It’s also a chance to better understand the systemology behind it. LifeWires’ Paul Gil, breaks down the purposes of mining into three simple ideals. In his words, mining is intended to “Provide bookkeeping services to the coin network, (Mining is essentially 24/7 computer accounting called ‘verifying transactions’), get paid a small reward for your accounting services by receiving fractions of coins every couple of days and keep your personal costs down, including electricity and hardware.”