Mining is how new coins (cryptocurrencies) are created in a blockchain network. Without mining, blockchain will cease to exist, as no one will be there to confirm the transactions in the network.
So, what exactly is mining?
Cryptocurrency Mining is the process of validating and adding transactions in a blockchain (distributed public ledger). Individuals who process transactions in a blockchain are called miners. Miners are paid rewards in the form of new coins for every new block of transactions they add to the network. This is how new cryptocurrencies/coins are mined on a blockchain.
As you might get the idea, the existence of a blockchain network very much relies on its miners, as no blockchain will survive without its nodes scattered around the world.
Importance of Crypto Mining
Crypto mining is how a blockchain network manages to run properly, with no errors and without middlemen to govern it.
Crypto Mining works on the proof-of-work consensus mechanism, where each node in the network is supposed to perform predefined tasks, usually comprising of complicated math, to validate a transaction and get rewarded in exchange.
This is how a blockchain network maintains its integrity while continuing to process transactions in a trustless manner (without requiring trusted third-parties).
In a blockchain network, users perform transactions involving digital tokens (cryptocurrencies) with each other. These transactions must be verified and recorded in a decentralized ledger. Miners are responsible to verify each of the transactions and add it to the chain into blocks. The process is called mining.
Miners are supposed to use their computing power to try and solve (complete) transactions faster than others. The first one to confirm a transaction and add a new block to the network is rewarded in new coins.
To sum up, mining is how a blockchain and cryptocurrency exist. This is why it matters.
Now, as for why you should participate in cryptocurrency mining, here are the benefits you get from it:
- Make money: Get paid to help mine new cryptocurrencies.
- Benefit from the value of cryptocurrency – The crypto you earn from mining may have the potential to rise high in value.
- Digital money – Easily make payments and send cryptocurrencies to anyone around the world.
- Cryptocurrencies are secure to hold and transact.
- Crypto mining is usually a better and safer option than investing in or trading cryptocurrencies.
- Start your own business around crypto mining
That’s why you should be mining cryptocurrencies.
Crypto Mining is Far From Dead
Irrespective of what people might say about the future of crypto mining, it will continue to exist and prosper. From the above details, you must have, by far, realized that blockchain exists because of its miners. If there are no miners or mining, there will be no blockchain and no cryptocurrencies for that matter.
Now, it’s true that crypto mining has become quite competitive and costly over time, because of the increasing user-interest and difficulty. But, that doesn’t mean that it will not survive. There are projects like Pieta out there that are trying to save the future of cryptocurrency mining through innovation.
Pieta is a crypto mining ecosystem where affordable, solar-based crypto mining contracts on the cloud are supplied to miners around the globe, enabling them to reduce the cost (energy) and increase efficiency and profits of their mining operations. Pieta mining contracts will allow mining of top currencies like Bitcoin and Pieta coin through solar-based electricity. Find more about Pieta Network