Very Basic Understanding of Mining Cryptocurrencies Such as Bitcoin

Mining is the process through which; cryptocurrencies are generated, transactions are verified, and ledgers are stored and backed. 

Mining is done by ledger keepers referred to as miners, using very powerful computers. 

Miners can either be corporations, individuals, or shared communities referred to as pools.

Mining is secured by the blockchain network, and involves solving of complex calculations.

The blockchain network is the cumulative interconnection of all the miners.

When a transaction occurs, it is published on a public ledger. The public ledger is then distributed to miners.

The verification process of the transactions involves solving complex calculations that come in form of a hash.

A hash is a code that is generated when a transaction is made.

The first miner to solve this code gets rewarded: In the case with Bitcoin, they are rewarded with;

  • A certain amount of bitcoins. 
  • The fees that is attached with the transaction.

As more and more transactions of a cryptocurrency are solved, the calculations become more complex for that specific cryptocurrency, therefore more computer hardware for computational power is needed.

When the calculations get complex, the returns and rewards for the miners tend to be very slow and low, especially for individual miners, who would either need to upgrade their computers or switch to mining newer cryptocurrencies, to be profitable.


 

Popular Top Mining Companies / Pools Where One Can Mine Bitcoin and Other cryptocurrencies

*Most mining companies and pools are situated in China.

Company nameDescriptionLocation
SlushWorld’s first Bitcoin mining pool.Distributed Globally (No Physical location)
AntPoolPresumed to be controlling more than half of the bitcoin mining network, and owns the largest cloud mining technology.Beijing, China
DiscusFish/P2PoolThe company itself does not own any hardware, rather it consists of a pool of individuals that contribute 100% of the computing power. China
BitFury“The Bitfury Group develops and delivers both the software and the hardware solutions necessary for businesses, governments, organizations and individuals to securely move an asset across the Blockchain.”Has offices in San Francisco, Washington D.C., Hong Kong, London and Amsterdam.
Data centers inIceland and the Republic of Georgia.   
BTC China PoolServes as an exchange for  Bitcoin, and other services for digital currencies.China
BW PoolA mining pool for Bitcoin, Ethereum, Ethereum Classic, and Litecoin.China

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