What is Cryptocurrency Mining?
Certified Financial Planner (CFP) Robert M. Ryerson, a graduate of Rutgers University and experienced in his field, has embraced cryptocurrency. Enthusiasts like Robert M. Ryerson have invested in a system that stores information on a distributed ledger.
Cryptocurrency mining brings cryptocurrencies like Bitcoin out of the protocol’s base design and into the system. Cryptocurrency systems contain a specific number of units, like Bitcoin’s 21 million coins, but not all are brought out of the system immediately. Instead, the system “borrows” processing power from users who serve as “nodes” for the distributed cryptocurrency ledger, solving the mathematical puzzles that help the system work, and periodically rewards those nodes with coins.
Mining nodes discover the solutions to these problems by guessing at random, and the distribution of coins to the mining nodes is random as well. Receiving cryptocurrency as a direct result of mining becomes more likely with more computing power from additional CPUs or GPUs, but relies on being lucky enough to both successfully solve an equation and lucky enough to be chosen to receive the reward. Once received, the newly awarded coins can be used in the same way as any of the existing coins on the network. The downside of being a node, however, is that these “miners” need powerful hardware which uses a lot of electricity, an expensive proposition.C