With paper money the government decides when to print and distribute money. However Cryptocurrency doesn’t have a central government.
With Cryptocurrency, people get Cryptocurrency by trading/selling or mining. People who perform mining are known as miners. The latter then use special software to solve math problems and then issue a certain number of Cryptocurrency in exchange. With this, it creates an incentive for more people to mine.
However over the years more and more miner came to the surface as a result mining process had been getting much more difficult.
WHAT IS THE FUTURE OF CRYPTOCURRENCY?
The market of cryptocurrencies is fast and wild. Nearly every day new cryptocurrencies emerge, old die, early adopters get wealthy and investors lose money. Every cryptocurrencies comes with a promise, mostly a big story to turn the world around. Few survive the first months, and most are pumped and dumped by speculators ad live on as zombie coins until the last bagholder loses hope ever to see a return on his investment.
In 2 years time from now, cryptocurrencies will be gaining legitimacy as a protocol for business transactions, micropayments, and overtaking Western Union as the preferred remittance tool. Regarding business transactions- you’ll see two paths: there will be financial businesses which use it for its no fee, nearly instantly ability to move any amount of money around. And there will be those that utilize it for its blockchain technology. Blockchain technology provides the largest benefit with trystless auditing, single source of truth, smart contracts, and colour coins.
Mekets are dirty. But this doesn’t change the fact that cryptocurrencies are here to stay and here to change the world. This is already happening. People all over the world buy bitcoin to protect themselves against thr devaluation of their national currency. Banks and governments realize that this invention has the potential to draw their control away. Cryptocurrencies change the world. Step by step. You can either stand beside and observe-or you can become part of history in the making.
If the trend continues, as global economics inflate and markets exbits signs of recession, the world will turn to cryptocurrencies as a hedge against fiat turmoil and an escape against capital controls. This is the only way out, and cryptocurrency as a whole is never going away, it’s going to grow in use and acceptance as it matures.
WHAT ARE MINERS DOING?
Principally everybody can be a miner. Since a decentralized network has no authority to delegate this task, a cryptocurrency needs some kind of mechanism to prevent one ruling party from abusing it. Imagine someone create thousands of peers and spreads forged transactions. The system would break down immediately. Therefore miners need to invest some work of their computers to qualify for this task.
In fact, they have to find a hash- a product of a cryptographic function- that connects the new block with its predecessor. This is called the Proof-of-Work. In bitcoin, it is based on the SHA 256 Hash algorithm. Bitcoins can only be created if miners solved a cryptographic puzzle. Since the difficulty of this puzzle increases the amount of computer power the whole miner’s invest, there is only a specific amount of cryptocrrency token that can be created in a given amount of time.
Mining process require an application-specific integrated circuits (ASIC) hardware device, often referred to as mining rig. These are essentially processors that make solely for mining Bitcoin and other cryptocoins and are intended to run non-stop all day, everyday.
ASIC miners and generally quite expensive and sell for several thousand dollars. Running such device consumes lot of electricity too.
Then miners found a better solution.
- They gather more miners to join the network
- Block creation increase
- Average mining time decrease (Ideal timing is established 10min per block)
- Mining difficulty in crease
- Block creation rate decrease
- Average mining time goes back to normal