Cryptocurrency Master Everything You Need To Know About Cryptocurrency and Bitcoin Trading, NFTs...

Mining Mining is discussed in this book for two reasons. The first is that it gives you an opportunity to invest in Cryptocurrencies in the form of mining. Even though you are interested in trading, mining is a form of investment in cryptos that are worth thinking about because the cost of mining has only a few factor inputs: electricity to run the computers, purchase of the computers, and the software and whatever labor costs the miner needs to perform the tasks. The hardware costs are typically one-off (there are also replacement costs, because the processors can burn out and might need replacing). Once you acquire the coins in this way, you can then use them to trade. That‘s one way of doing it. But not everyone wants to get knee-deep in the process. For those folks, we advise just getting to the exchange and starting your trading from there.

We mentioned earlier that mining is the process that brings the coins to life. But now we are going to look closely at what that is. In the next section, we will talk about the blockchain and what it is, but for now, just know that it exists.

While mining efforts result in rewards in the form of coins, the actual mining is the process of computation. In other words, mining is just really a ring of millions of computations to solve a puzzle. The first one to solve that puzzle will be awarded the coin. Thus, the question here is: what is the puzzle?

Without going in too deep, the puzzle relates to hashing. Hashing is a branch of mathematical cryptography that uses a one-way function that is deterministic. That means if I took a word and hashed it, I would get an unpredictable sequence of characters that cannot be reverse engineered. I could take this entire book and hash it and what I will get is a string of characters that look like this (this is the hash of the following sentence: The rise and fall of the Roman Empire): 5C94D7845A6A2163D39CA32A0D19122C6B95FA591CF58636DBEBB475EDA4A160