Cryptocurrency mining, what is it and how does it work?
For many people, thinking about virtual currencies is the future. But even the movie “Back to the Future” can’t imagine that this money will be transferred to the Internet today. Although physical currencies still dominate, Bitcoin and all virtual currencies are increasing every day. If you continue reading, you will know that there is even real cryptocurrency mining.
Since 2016, Bitcoin has truly appreciated. It even hit a record high, hovering above US$2,600. To this day, we can say today that he is breaking records almost every week. This means that virtual currencies are all the rage and flourish.
But in addition to Bitcoin, an excellent virtual currency, there are other virtual currencies like Ethereum. This currency is responsible for the development of a practice called cryptocurrency mining, which is a technology that uses the power of computers to make real money.
But what is the basis of cryptocurrency mining?
To give you a quick idea, in the world of cryptocurrency, money is not created, but discovered. This process is called mining. Like all mining, there are miners who get rewards (cryptocurrency) from time to time.
Now we will explain the working principle of cryptocurrency mining in a few simple steps:
Cryptocurrency users have been sending virtual currency.
The transactions made using cryptocurrency are recorded in the blockchain, which is more widely known as
Miners confirm and record these transactions. In return, they will receive a small commission as compensation. As you can see, working in a virtual mine is very different!
This is the procedure followed by miners in cryptocurrency mining. If you want to mine Ethereum, you must build a powerful computer to serve the network. As a result, the prices of components such as graphics cards have skyrocketed.
Now that you understand the subject, at some point you may want to invest in digital currency or become one of these miners. No matter what happens, remember that you can become the currency of the future.
But how does cryptocurrency work?
How can I buy and sell them without the need for an intermediary-as described in my BBVA digital guide? Why are we talking about money or digital assets when we talk about cryptocurrencies?
According to its operation experts, each cryptocurrency has its own algorithm and is responsible for accurately managing the number of new units issued each year. In turn, they use cryptographic encryption, in addition to protecting their ownership, but also protecting transactions, making it impossible to copy virtual currencies stored in digital wallets.
However, if you decide to engage in the trading of cryptocurrencies, you should also understand two other basic concepts in the field of digital assets: “blockchain” and “exchange.”
More information | How and where to invest my money The network that cryptocurrency runs on is called “blockchain” or “blockchain” and it stores all the changes that occur in transactions
“Blockchain” or “blockchain” is the network on which cryptocurrency runs and stores all the changes that occur in its transactions, so it acts as a kind of “ledger”, which is public and accessible.
Although the “exchange” is a platform that allows transactions with cryptocurrencies and acts as an “exchange market” because you can buy, sell or trade cryptocurrencies there in exchange for local currency, in our case it is for the sole.
Specifically, in the Peruvian market, some of the platforms or “exchanges” that allow you to buy, sell or trade cryptocurrencies are Buda.com, eToro, BTC Agent, Cryptex.
