Mining

Mining is the extraction of cryptocurrency using the capacities of special equipment such as computers. For Bitcoin and many other crypto coins, this is the only way to increase emissions. Miners receive a reward since their activity ensures the functioning and integrity of the entire system. It is the main task of mining.

At the initial stages, the owner of almost any computer using the processor capacities could engage in mining.

In Bitcoin, where the efficiency of mining directly depends on the capabilities of the equipment, the Proof-of-Work protocol is used. It protects the network from double spending and is the basis of the mining reward system. The more the miner did the work, the higher his reward will be.

Self-mining is almost pointless nowadays because the probability of obtaining a coin is nearly zero. Consequently, miners started to gather in groups. They unite their capabilities and capacity to mine bigger. The remuneration here will be less, but, at least, it will be.

The disadvantages of mining

If we talk about the drawbacks, the main one is the inability to calculate profits due to the regularly growing complexity of the network. Another disadvantage is the unstable situation in the cryptocurrency market. Market conditions are continually changing. There is a likelihood that the virtual currency chosen for mining will bring good income today, and tomorrow its mining will be meaningless. Therefore, the miner needs to monitor market conditions systematically and respond to its changes.