Cryptocurrency mining explained for beginners
With the recent shortcomings, the fate of cryptocurrency in India is still unsure. Even though various media groups have posted the Panel favours ban of cryptocurrency, the case is still pending.
But if you're interested in what the Department of Economic Affairs of India has to say about cryptocurrency, you can check out the signed report and bill that will be presented to Central Government for their verdict from this link: https://dea.gov.in/sites/default/files/Approved%20and%20Signed%20Report%20and%20Bill%20of%20IMC%20on%20VCs%2028%20Feb%202019.pdf
Anyway moving on to the topic in hand, since this is not a political blog and I'm not interested in pointing out the inadequacy of our ministers, let's check out how can a noman mine cryptocurrency and what is the future of cryptocurrency?
The accountability of cryptocurrency is dependent on the miners that act as a witness to a transaction. These witnesses in return for their service receive a small share of the transaction.
These transactions are based on encrypted data being passed over and over again to maintain a form of the ledger.
Which is why the difficulty of solving an encryption problem over time becomes more and more difficult ultimately saturating the total amount of a certain cryptocurrency that can be generated under feasible circumstances.
This saturation decides the market cap of a cryptocurrency.
Where do all these transactions come from?
We call them vendors. They are the source of all problems to be solved. For whatever transaction or for improving the accountability of cryptocurrency they need these encryption problems to be solved using certain algorithms.
On a higher level, you can see it as
Vendors request for hash power for solving problems. In return for this hash power, the miners receive a small share of the transaction.
How can one mine cryptocurrency?
First, there are a number of cryptocurrencies out there. To mine a certain cryptocurrency you need to download its wallet and their respective miner and join a mining pool. To understand it better you can go to the website of your favourite cryptocurrency and find their wallet software, miner and mining pool from there. You will also find proper guide respective to their miner there only. You can understand which cryptocurrency would be more profitable with respect to your system/mining rig by checking profitability on whattomine.com and other such websites.
An easier way to mine cryptocurrency is to use a mining platform that manages algorithms, wallet and mining pool for you.
Nicehash, Cudominer, Minergate, Awesome Miner are examples of such platforms.
All you have to do to get started is just sign up on their website, download their software and use the bitcoin address they provide to mine using that software.
What happens when you've mined cryptocurrency?
Now the sole purpose of earning money is to be able to use it buy something. Once you have cryptocurrency in your wallet. There are quite a few websites that accept cryptocurrency as a payment gateway. Mining platforms mentioned above also have the option to transfer your money to digital currency exchange like Coinbase.
What is the future of cryptocurrency?
Even though it might seem that the Department of Economic Affairs, India might be against cryptocurrency but they also understand the viability of the same. To quote
"The Government does not consider crypto-currencies legal tender or coin and will take all measures to eliminate use of these cryptoassets in financing illegitimate activities or as part of the payment system. The Government will explore use of block chain technology proactively for ushering in digital economy."
There's still a hope for cryptocurrency maybe not in the near future but definitely in a distant one.