When you first heard about mining bitcoin or some other coin you probably thought that people are taking their equipment and mining it like gold. While it’s not present in the physical world, people are still mining it similarly like in the old days, the only difference is that we now have technology that is helping us mine these cryptocurrencies over the internet.
When we say it’s similar to the old days we mean that once the technology around a certain coin is created it still needs to be brought out of the system and into the market. To achieve that you need miners. Now you are probably wondering what exactly miners are. To understand that we need to understand what nodes are.
Nodes
Node is the name we give powerful computers that are running software on them to extract those coins from the system, by participating in the blockchain. Anyone in the node is connected with each other and once a change in the block happens everyone is informed at the same time. Without nodes there would be no transactions over the network, so you can imagine nodes like banks, only here everyone works with each other for each other, where the bank works for itself.
How Crypto Coin Mining Works
The whole focus on the mining is basically to provide a self-sustained infrastructure where information is changed between the nodes. Nodes provide a bookkeeping service to the coin network as well as power for transactions. Mining is essentially a network of computers that are performing accounting services like performing and verifying transactions 24/7. The miners get paid for their accounting services with coins every time a certain difficulty has been fulfilled.
If you are wondering from where they get paid, it’s from the blockchain that was created for that specific coin. For instance, if we talk about bitcoin every miner is getting paid in bitcoins for performing bookkeeping services on the blockchain web from the blockchain web. The system is made to reward people who are performing these calculations, so the more calculations you perform the more you will get rewarded.
How many computers do you need to mine?
It depends. If you wanted to start mining a cryptocurrency that has a high difficulty than you would need more computing power than you would need for one that has a lower difficulty. An example would be that if you wanted to mine coins like bitcoin or Ethereum it would take you longer than a coin that was made a couple of days or months ago. The more people mine a certain coin the harder it becomes to mine in the future as the difficulty raises.