You might have heard of Bitcoin, crypto currencies, and blockchain by now. But how does it actually work?
Mining is an integral part of, and results in, adding more (crypto) coins to the cryptocurrency ecosystem.
The additional coins have to be generated through a computational process. You do it by letting your GPU calculate complex mathematical equations, which can be done at any given time of the day. Doing so enables you to become an integral part of the currency network, not only by securing the network through your dedicated hardware, but also by generating more coins to put into circulation.
Cryptocurrencies (crypto) are designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units / coins (mining), and to verify the transfer of assets.
They are a type of digital currencies, alternative currencies and virtual currencies.
Crypto uses decentralised control as opposed to centralised electronic money and central banking systems. The decentralised control of each cryptocurrency works through a blockchain, which is a public transaction database, functioning as a distributed ledger.
💡 Want to learn more about crypto and blockchain? Check this Blockgeeks' Beginner Guide
Did you know?
To ensure that no more coins are generated every day than originally intended, the mining process is linked to a difficulty rating.
This rating goes up as more computational power joins the bitcoin network, and decreases when there are fewer miners competing for network blocks.
This level of difficulty is what determines how much VRAM is required to run GFS