Does this describe mining well? Is this accurate? What more should I mention?

This is an excerpt from my writing:

> Besides outright buying a particular, another way to obtain a coin is by mining it. Mining a coin means you run a particular algorithm on your computer to help the coins network compute transactions, generate new coins, and secure the network.

> Mining a coin is most fruitful when a coin is first launched. This is true because there won’t be as many miners competing with you. If or when the coin grows in popularity, so will the mining competition. Coins initially are able to be mined successfully with a normal computer. As more miners compete, the more resources are used to mine new coins for the currency.

#Mining Pools

> Once a coin becomes more difficult to mine on your own, you can join a group of other miners and pool your power. A mining pool enables small miners to come together as a group and mine as one big miner. You will be rewarded based on how much computer power you contribute to the pool. Every mining pool is different, and has different payouts. There are websites available to estimate how much your computer could make in a mining pool.

> As I write this book, there is a shortage of computer chips. While the cryptocurrency industry may not be the sole reason for this shortage, I believe it’s playing a major role. Energy will always flow to where it’s most rewarded. For example, if you have a farm, you’ll want to grow the most profitable goods. If there is a demand for green apples, you will grow green apples as much as possible. Same goes for chip companies, if there is a demand for mining chips, suppliers will continue making those..

> In cryptocurrency mining, you have several different companies that make mining equipment. These mining computers are designed to mine specific types of cryptocurrency algorithms. There are several different proof of work algorithms in the crypto -space. The more popular ones are SHA-256, CryptoNight, Ethash, and Scrypt.

> Miners play a critical role in crypto-currency. If we use the railroad system as a metaphor, the miners would be responsible for making sure the railroad cars stayed on track, went where they were intended to go, make sure they got to their destination safely, and make sure no railroad cars outside of the network entered, in other words- protected against attacks.

> The miners of the crypto-currency provide security for the transactions. The miners run the check and balances of the blockchain network. Usually this requires the miners to run the crypto mining software on a computer to perform this task. The program was created by the project’s developers. It’s not unusual for the developers to participate in mining the coin as well. We hope the devs are mining the coin.

> Miners use up real world resources. Miners rely on electricity to run the mining software of the crypto of their choosing. The amount of miners of a currency isn’t as important as the number of devs. Yet, it’s always good to have people who want to mine a coin that you are considering investing in. Each currency has its own specifications on how miners are rewarded.

> If a currency wants to reduce the likelihood of a 51% attack, it’s best to make it so the mining power will be more difficult to centralize. Centralization kills in Cryptique. If one nefarious mining rig controls more than 51% of a currency, very bad things can happen. The culprit could double spend, change the entire rules of the currency, just to name a couple issues. If a currency can simply be controlled by buying expensive machines, it will become centralized, possibly by an unwanted entity.

What do you think?

Leave a Reply

Your email address will not be published. Required fields are marked *

GIPHY App Key not set. Please check settings


StonerDoge – STONED – Just launched – Win tokens just by holding

What is liquidity mining and why is Andre Cronje not a fan of it?