Any cryptocurrency is a decentralized network of transactions for the exchange of assets. To create such a network requires the use of computing power and the involvement of certain resources. Since in such a network there is no main center that would manage the process, it is necessary to interest the network participants with some kind of reward. Therefore, in the first network, bitcoin (bitcoin) was made a network currency, which simultaneously serves as a means of payment inside, and a reward for those who support such a network.

Network support consists in confirming transactions by combining them into blocks and calculating the key (hash) of such a block. The block key does not allow changing the block information in the future, which excludes the possibility of forging transactions made in the block. The block key must have certain properties, its first characters will be zeros. Finding (calculating) a key with the given parameters does not happen instantly - you need to generate many keys to get the given one. But that's not all - after generating the key, it is necessary to receive confirmation of the fidelity of such a block from other network participants. Confirmation consists in checking the block key. At least 120 confirmations must be received on the bitcoin network. Such confirmation is another degree of protection against corruption and additional verification of data on the network.

This is exactly the point of cryptocurrency mining. But the above-described mining process (literally "mining in a mine") is called PoW (Proof-of-Work) or "proof of work". This method is classic, but very expensive. For the uniform growth of the network and the involvement of new participants in order to ensure its stability, the complexity of calculating the block key increases - this generates an increase in competition among miners. The costs of miners (literally "miners" - that is, network participants) are in the purchase of high-performance equipment and the cost of electricity for its operation. Thus, each new bitcoin has a real material resource under it, which is finite. A new coin takes time to compute, equipment and electricity. Therefore, talking about a certain virtuality of bitcoin is not entirely logical.

How is cryptocurrency mining

Initially, mining (transaction confirmation) could be done on an ordinary personal computer. Then, for calculations, they began to use video cards that had a graphics processor for outputting data. But the increase in computing power requirements has led to the emergence of specialized devices called ASICs (application-specific integrated circuit - special purpose integrated circuit). Although, in fact, equipment for mining cryptocurrencies is not microcircuits, but whole specialized devices designed to calculate keys for blocks.

Miners assemble such devices into farms where hundreds of such devices can be used. In addition, to obtain efficiency in their work, miners are combined into pools. Computations are distributed across the network among miners, which increases their productivity. We also use special software such as https://crypto-bears.com/mayning-efira-s-ohgodanethlargementpill-uvelichenie-heshreyta-1080ti-50-mh-s/ 

Thus, material costs become very significant. In addition, the amount of reward decreases as the number of new bitcoins increases. All this caused criticism of this method of confirming transactions. In this regard, other ways of confirming blocks have appeared:

PoS (Proof-of-Stake) or "proof of ownership" - when a block is confirmed at the expense of participants, depending on the number of coins; PoC (Proof-of-Capacity) or "volume confirmation" - a network participant confirms the transaction, allocating a disk space.

What is the essence of cryptocurrency mining

Mining is a way of making money on cryptocurrency (along with speculation, investment and raising money through ICO). Such earnings depend on the cost of "extracting" the next coin. There is an element of risk here due to the high volatility of cryptocurrencies. But at the same time, it creates good opportunities in terms of payback. As a rule, these are months, not years, as in ordinary business. It should be noted that cryptocurrency volatility is not the only negative factor. The rapid obsolescence of technology is as much a risk as the volatility of the price of the currency itself. This is due to the constant improvement of technical means - the change of generations of devices. Even if the devices do not become obsolete morally, they cease to be effective due to the principles of operation laid down in them.

In general, mining is a very interesting social phenomenon. Most likely, in the future it will be possible to calculate not only keys for blocks, but also to do other, more complex and necessary calculations.