Mining cryptocurrency can be a lucrative endeavor with enough computing power
Mining cryptocurrency is in the news a lot lately. People are finding their computers have been compromised by malware and are mining, or in some cases entire botnets are mining. But what does that mean?
This isnt mining in the traditional sense. There are no pick axes or canaries involved. Instead. its more about trying to win a blockchain lottery to earn the reward at the end.
What does that all mean? Lets hash it out.
To begin a discussion of mining cryptocurrency we need to start with what cryptocurrency is. Cryptocurrency is a digital form of currency with a cryptographic underpinning that is used as a secure medium of exchange. There are literally hundreds of different cryptocurrencies with varying real-world values. Many believe its the future of currency.
The most popular cryptocurrency is bitcoin, you may have heard of others like Etherium, too. While cryptocurrencies may differ in terms of the algorithms and encryption they use, they all share one similiarity: blockchain. And thats what we need to talk about next.
Blockchain is a digital ledger of transactions that is impossible to alter. It uses hashing and a concept similar to salting to continuously complete blocks of information that chain to form an immutable ledger.
Hashing is the act of mapping data of any length to a fixed-length output. When cryptography is involved its a one-way function. The most popular hashing algorithm is SHA-256, which outputs at a length of 256 bits. Every hash value is unique. Even the tiniest alteration to the data being hashed caused the entire value to change.
Hashing is considered one-way because of the amount of computing power it would take to reverse-hash it. For a 256-bit output, calculate 2 to the power of 256 (2 X 2 X 2 256 times). Your odds of finding the correct value are 1 in the product of that equation. Those are astronomical odds. It would take a supercomputer thousands of years to compute that.
Now lets fit it all together. With a cryptocurrency blockchain, as transactions occur they are broadcast and added to various private ledgers. Each one of these transactions is digitally signed for the sake of authenticity. On the other end, there are people or groups collecting these transactions and building ledgers. They are also computing to find a value that when hashed along with the ledger, produces a set number of 0s at the beginning of the hash value. Thats the portion thats similar to salting.
So lets say that for our example cryptocurrency, weve set the total to 10 0s. That means the first 10 spots of the 256-character hash value should all be 0s.
When the correct value is found, the block is closed, its broadcast officially and added to everyones blockchain, then the hash of the old block is put atop the new ledger and the process begins again. This is how blocks are created in the chain.
The act of computing the correct value to satisfy the hash function in blockchain is called mining. When it comes to cryptocurrency, a reward is provided to whoever solves for the correct value. That makes it lucrative to compute the correct value, though it takes quite a bit of power to accomplish that.
Oftentimes people pool their computing power together and split the reward if they solve for the correct value. In other cases, hackers have been known to co-opt others computers and use some of their computing power behind the scenes to mine cryptocurrency. There are entire botnets doing nothing but mining.
Really, solving for the correct value is like winning the lotto. There are countless people and botnets attempting to find the value and whoever finds it first gets the reward.
Of course, if you can accumulate enough computing power you could solve for the value enough of the time that you could accrue a substantial amount of cryptocurrency.
When someone says mining cryptocurrency what theyre referring to is the act of trying to compute a specific hash value by producing a set value that, when hashed along with the block ledger, produces a specific result. This requires considerable computing power, but considering the rewards its well worth it.
Heres what we covered in todays discussion:
- Regulating cryptocurrency exchanges - The Indian Express - June 2nd, 2020
- Russia Sort Of Dropped The Hammer On Bitcoin, Crypto - Forbes - June 2nd, 2020
- Cryptocurrency This Week: Indian Crypto Exchanges Witness Surge In New Users, Bitcoin Sees $1000 Spike & More - Inc42 Media - June 2nd, 2020
- SEC Wins Terminating Sanctions Against Cryptocurrency Creator - Law Street Media - June 2nd, 2020
- Bitcoin hodl waves indicate 60% of the cryptocurrency is being hoarded analysts suggest a bull run could be - Business Insider India - June 2nd, 2020
- Cryptocurrencies and Online Gaming: 4 Use Cases - the blockchain land - June 2nd, 2020
- Cryptocurrency Market News: Its a sea of red in the crypto market today - FXStreet - June 2nd, 2020
- Japanese Finance Minister May Be Opposed to Lowering Tax on Crypto - Cointelegraph - June 2nd, 2020
- Bitcoin Cash Vietnam-Based Fiat-to-Crypto Trading Support Added to Bvnex Exchange | Exchanges - Bitcoin News - June 2nd, 2020
- Crypto.com Becomes the First Cryptocurrency Company in the World to Achieve ISO/IEC 27701:2019 Certification - WFMZ Allentown - June 2nd, 2020
- Todays cache | Crypto-jacking, and more - The Hindu - June 2nd, 2020
- The Ethereum cryptocurrency has risen above $250,71, showing an increase of 5% - The Times Hub - June 2nd, 2020
- Chinas Cryptocurrency Legitimate Threat to Bitcoin and Dollar - Move Your Money - June 2nd, 2020
- Latest News On The Cryptocurrency Market | Intel, CoinBase, BitGo, and... - Azizsalon News - June 2nd, 2020
- As Bitcoin Flounders, This Tiny Cryptocurrency Has Soared Over 200%Heres Why - Forbes - May 23rd, 2020
- What to Know About Billions' Cryptocurrency Drama If You Know Nothing About Cryptocurrency - Vulture - May 23rd, 2020
- Tether, the most promising stable coin, now the third most valuable cryptocurrency - Nairametrics - May 23rd, 2020
- Taxation on the Cryptocurrency - Live Bitcoin News - May 23rd, 2020
- Bitcoin Worth $282K from the 2016 Bitfinex Hack on the Move - Bitcoin News - May 23rd, 2020
- A detailed overview of Cryptocurrency Market [PDF] with innovation in technology, various aspects of the industry players, regions, types, and... - May 23rd, 2020
- Why Have Cryptocurrency Payments Failed to Take Off So Far? - Cointelegraph - May 22nd, 2020
- Cryptocurrency and COVID-19: Bitcoins Path to a Safe Haven - Cointelegraph - May 22nd, 2020
- Analysis on Impact of COVID-19- Cryptocurrency Mining Hardware Market 2020-2024 | Rising Popularity Of Mining Pools to Boost Growth | Technavio -... - May 22nd, 2020
- Top Cryptocurrency Trading Bots 2020 - Conquer The World - KryptoMoney - May 22nd, 2020
- Crypto hedge funds struggle to recover from bloodbath - Financial Times - May 22nd, 2020
- Bitcoins prices slip amid speculation that a block of the cryptocurrency possibly linked to creator Satoshi Nakamoto just changed hands - MarketWatch - May 20th, 2020
- Is 2020 the year to invest in cryptocurrency? - About Manchester - May 20th, 2020
- Ripple, third most valuable cryptocurrency, gets approval from the US for money transfers - Nairametrics - May 20th, 2020
- PODCAST | Why is Africa the most promising region for cryptocurrency? - Business Day - May 20th, 2020
- Learn how to invest in the stock market and cryptocurrency - New York Post - May 20th, 2020
- COVID-19 Impact ON Cryptocurrency Exchanges Market: Size, Market Analysis, Application, Growth Drivers, Trends, status and Research Report by 2025 -... - May 20th, 2020
- Cryptocurrency Market 2020 Size & Share Outlook with COVID-19 Impact Analysis and Forecast to 2026 - Cole of Duty - May 20th, 2020
- Cryptocurrency Receiving Massive Favor Amidst Inflation - Move Your Money - May 20th, 2020
- Cryptocurrency Mining Hardware Market 2020 Global Overview, Growth, Size, Opportunities, Trends, Leading Company Analysis and Forecast to 2026 - Cole... - May 20th, 2020
- Telegram shuts down its cryptocurrency operation - The Verge - May 18th, 2020
- The Global Digital Asset & Cryptocurrency Association in Chicago wants to be the one to regulate digital currencies - Crain's Chicago Business - May 15th, 2020
- Bitcoin halving Q&A: what it's all about and what it means for the cryptocurrency - The Conversation US - May 15th, 2020
- This Minor Cryptocurrency Is On Track To Smash Bitcoin In 2020 - Forbes - May 15th, 2020
- FATF: How Will the Guidelines Affect Canadas Crypto Industry? - Finance Magnates - May 15th, 2020
- Cryptocurrency market update: Donald Trump will send Bitcoin to the moon - FXStreet - May 15th, 2020
- Bitcoin and cryptocurrency markets: Where next? - FXStreet - May 15th, 2020
- Thailand Sticks by its Cryptocurrency Commitment - The Phuket News - May 15th, 2020
- Man charged over cryptocurrency investment fraud - The Star Online - May 15th, 2020
- Cryptocurrency Market News: Bitcoin in tactical retreat to $9,600 before another jump to $10,000 - FXStreet - May 15th, 2020
- No way around it: the irreparable damage cryptocurrency does to the environment - Green Prophet - May 15th, 2020
- Cryptocurrency Market News: Bitcoin fails to hit 10K but could make another push - FXStreet - May 15th, 2020
- Teen Hackers Accused of Cryptocurrency Theft, Sued For $71 Mn - CISO MAG - May 11th, 2020
- Paul Tudor Jones calls bitcoin a 'great speculation,' says he has almost 2% of his assets in it - CNBC - May 11th, 2020
- Coinbase CEO Says New Cryptocurrency Bill Would Have Major Impact on Future of Finance - The Daily Hodl - May 11th, 2020
- Cryptocurrency Market Update: Bloodbath as Bitcoin nosedives to $8,000, Ethereum $180 and Ripple $0.1780 - FXStreet - May 11th, 2020
- Cryptocurrency Mining Hardware Market Growth by Top Companies, Trends by Types and Application, Forecast to 2026 - Cole of Duty - May 11th, 2020
- The IRS Wants to Know About Your Cryptocurrency Transactions - Interesting Engineering - May 11th, 2020
- Bitcoin's halving might see a large influx of investors wanting a piece of the cryptocurrency market - Mashable SE Asia - May 11th, 2020
- Investors Who Bought iMining Blockchain and Cryptocurrency (CVE:IMIN) Shares A Year Ago Are Now Up 56% - Simply Wall St - May 11th, 2020
- Cryptocurrency Market Update: Bitcoin, Ethereum and Ripple have a bullish start to Saturday, following Fridays drop - FXStreet - May 11th, 2020
- What is a cryptocurrency and why is it needed? - AMBCrypto English - May 11th, 2020
- Cryptocurrency Litecoin dipped to 12% - The Times Hub - May 11th, 2020
- Hong Kong Cryptocurrency Platform Crypto.com Announces New $100 Million Insurance Policy Led By Arch Underwriting That Extends Total Coverage to $360... - May 11th, 2020
- Verady Unveils Ledgible Accounting Partnerships With Blockchain.Com and Algorand - AiThority - May 7th, 2020
- Cryptocurrency Market Update: Bitcoin leaves behind Ethereum and Ripple in the dust as bulls start consolidating their positions pre-halving -... - May 7th, 2020
- 7 Explosive Cryptocurrencies to Buy for the Bitcoin Halvening - InvestorPlace - May 7th, 2020
- Talking Crypto: Learn to really understand the world of cryptocurrency - Financial Post - May 5th, 2020
- Cryptocurrency This Week: Crypto Exchanges Seeks GST Clarification From RBI & More - Inc42 Media - May 5th, 2020
- Google Profits off Impersonations of Banned Cryptocurrency Celebs and Companies - Bitcoin News - May 5th, 2020
- Andreessen Horowitz Creates Second Cryptocurrency Fund With $515M Investment - Benzinga - May 5th, 2020
- Cryptocurrency And Blockchain Technology Market to Observe Strong Development by 2022 - Kentucky Journal 24 - May 5th, 2020
- Bitcoin Accounts For 78% Of The Cryptocurrency Derivatives Market In Q1 2020, Study Finds - CryptoPotato - May 5th, 2020
- MyCryptoMixer 2020 - The Best Bitcoin Mixer Necessary To Protect User's Anonymity and Privacy | Press release - Bitcoin News - May 5th, 2020
- TenX Debit Card Allows Spending Crypto as Cash - Move Your Money - May 5th, 2020
- Cryptocurrencies are gaining major traction as global economy shrinks - IOL - May 5th, 2020
- Total Cryptocurrency Market Cap Adds $20 Billion In Less Than 24 Hours - newsBTC - April 29th, 2020
- US Congress Considering More Than Two Dozen Cryptocurrency and Blockchain Proposals - The Daily Hodl - April 29th, 2020
- Congress Has Now Introduced 32 Crypto And Blockchain Bills - Forbes - April 29th, 2020
- Did This Norwegian Multimillionaire Invent a Cryptocurrency Ransom to Cover Up the Murder of His Wife? - Vanity Fair - April 29th, 2020
- Drawbacks of Cryptocurrency Exchanges - How Non-Custodial Services Are the Solution | Sponsored - Bitcoin News - April 29th, 2020
- Circuit Breakers Could Be Coming to CryptoBut Will they Be Effective? - Finance Magnates - April 29th, 2020
- North Koreas Alleged $670M Cryptocurrency Stash in Question Amid Rumors of Kim Jong-Uns Death - BeInCrypto - April 29th, 2020
- Tips to Understand Cryptocurrency and White Paper - Crypto Daily - April 29th, 2020
- Ethereum Near Levels That Sent Price 25% Down in 2019 - newsBTC - April 29th, 2020
- $8.8 Trillion Traded in Cryptocurrency Spot and Futures Markets in Q1: Reports | Markets and Prices Bitcoin News - Bitcoin News - April 29th, 2020