What is digital currency extraction or mining?
Mining is the process of creating a block of transactions that must be added to the blockchain. Miners use their time and computing power to process transactions and generate blocks, and receive rewards for approved blocks.
Ethereum Mining (ETH)
As you know, mining is the process of creating a block of transactions that must be added to the Ethereum blockchain. Ethereum, like Bitcoin, currently uses a Proof of Work (PoW) mechanism. Atrium miners use their time and computing power to process transactions and generate blocks. In decentralized systems like Ethereum, we have to make sure that everyone agrees on the order of the transactions. Miners contribute to this consensus by solving difficult computational puzzles to generate blocks. Which is a way to secure the network against attacks.
The Ethereum network has its own blockchain. All transactions using Ethereum must be verified by the miners. For this reason, it takes some time for the Ether you send to reach the receiver. The transaction must be verified and placed inside the Ethereum blockchain. This process is called proof of work. Your job as a miner is to make sure no one cheats.
Miners are solving complex mathematical equations to ensure the validity of transactions. When a miner solves this equation, he announces the problem to the other miners using another computer language: “Hello, I found it! "I found the number we were looking for all this time."
Other miners check if this number is correct and if 51% agree with it. To add a new block to the blockchain. This new block contains all transactions that have been completed and are now approved. The miner who finds the number will be rewarded! Miners then begin solving a new math problem to validate another block of transactions.
Factors affecting the revenue of cryptocurrencies
Several important factors in mining profitability are:
- Appropriate hardware: Miners must have the latest hardware to compete and succeed in mining. Equipment can become obsolete within a few years.
- Electricity costs: It is essential that a miner can use electricity at the lowest possible cost.
- Digital currency price: The price of the desired currency is very important in extraction. Because miners receive a certain amount of digital currency when solving math problems correctly. If the value of the currency is low, it may not be cost-effective to extract.
- Network Hardness: Network difficulty is a measure of how to extract a block of cryptocurrencies, or more technically, to find a target. The high difficulty of the network means that extracting the same number of blocks requires more computing power and makes the network more secure against attacks.
- Hash rate: The hash rate is a unit of measurement of the processing power of the blockchain network. The network must perform intensive mathematical operations for security purposes. When the network reaches a hash rate of 10 Th / s, it means that it can perform 10 trillion calculations per second. In other words, a hash rate is the total computational power used to extract and process transactions in the proof-of-work blockchain. The hash rate is often used as a measure of network health in proof-of-work cryptocurrencies. The higher the hash rate, the 51% more difficult it is to successfully attack. But increasing hash rate over time can also indicate an increase in mining interest. Conversely, reducing the hash rate causes miners to leave the network. Because network security is no longer profitable for them.
Digital Currency Mining Calculator
To make the most of your mining equipment, as well as have a better estimate of mining revenue, you need to explore the potential of your mining machine and not go into the process blindly. Hence the use of digital currency mining calculators is essential.
To work with the bombe's Ethereum mining calculator, consider the following:
- Hashing Power: Enter the hash rate of the extractor in the TH / S unit.
- Power Consumption: Enter the amount of energy and electricity that your mining hardware consumes per watt unit.
- Cost per kilowatt-hour: Enter your electricity tariff (household, industrial, etc.) in kilowatt-hours.
- Pool fee: Enter the amount of fee the pool receives from you in percentage points.