Cryptocurrency mining is the process of solving specific problems using specialized software or hardware devices to confirm cryptocurrency transfer transactions and be rewarded with newly generated cryptocurrency. Anyone can mine cryptocurrency with a computer and internet connection that meets the necessary requirements.
After transfer transactions are completed between wallets, they are usually transferred to a transaction pool (mempool) and held there until they are confirmed on most blockchains. These transactions are then combined to create blocks, which are recorded on the blockchain after being verified and confirmed by devices connected to the network.
How To Do Cryptocurrency Mining?
There are many methods of cryptocurrency mining in recent times. We can examine these methods under basic headings.
GPU (Graphics Processing Unit) is a specialized processor unit responsible for creating graphics, which is commonly found on graphics cards or motherboards.
GPU mining is a type of mining where calculations are made using the processors of graphics cards to verify transactions.
The processors in graphics cards are much more powerful than those in computers, which is why graphics cards are usually used for cryptocurrency-based transactions.
It is possible to mine cryptocurrencies using the processor known as the Central Processing Unit (CPU). By installing mining software on any computer used in homes, CPU mining can be easily done.
However, CPU mining is no longer preferred due to its low performance compared to other methods. Additionally, due to its low performance, mining cryptocurrencies with processors has become nearly impossible for the majority of popular cryptocurrencies.
Therefore, CPU mining is now being used in Proof of Stake (PoS). In this method, high computing power is not required, so it is sufficient for the mining software to be running and for the wallet to have an appropriate amount of cryptocurrency to generate income.
ASIC, Application-Specific Integrated Circuits, are systems specifically designed for cryptocurrency mining. The software and special hardware in ASIC devices turn them into specialized hardware for cryptocurrency mining.
ASIC devices have high computational capacities and consume a lot of energy. Therefore, people who mine with ASIC devices need a powerful electrical infrastructure to cover their energy consumption.
Cryptocurrencies based on the Proof of Work (PoW) consensus, such as Bitcoin and Litecoin, now require ASIC mining devices due to their high computational requirements.
Cloud-based mining, which is offered as an alternative service for those who want to mine cryptocurrency but do not have sufficient hardware, time, and knowledge, provides users with the opportunity to rent processing power for cryptocurrency mining.
Users rent processing power through cloud mining services and direct it to the pool they prefer for cryptocurrency mining.
Users can choose from different contract options, taking into account various costs such as hardware, software, cooling, and maintenance.
Although cloud-based mining seems like a lower-cost option compared to other mining methods, it is becoming increasingly difficult for users to make a profit due to the increasing cost of leasing options.