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Understanding the world of cryptocurrency: step by step

Understanding the world of cryptocurrency: step by step

Sunday March 25, 2018,

3 min Read

Are you really serious about plunging into the world of cryptocurrency? You need to know the basic principles of cryptocurrency and one of the basic principles that every party should know is how to calculate your prospects in the world of digital currency. Each involved party has different resources and most moderate miners may only capitalize some GPU units to mine a scrypt currency or an ASIC machine to mine bitcoins. Some of the more serious miners can even combine several VGA units to get a great mining tool, which requires a sizeable budget.


How the cryptocurrency mining process works

Essentially, cryptocurrency mining works by involving solving cryptographic puzzles. When a miner performs "solving these complex puzzles", he can provide proof of his work which is then rewarded with a digital currency, not a conventional currency. For information, there are at least two recognized proof-of-work hashing algorithms; scrypt and SHA-256. You can find some other evidence but so far, both are popular and accepted globally. In recent times, there are several new crypto currencies that certainly work with different types of algorithms.

SHA-256 algorithm has the main characteristics as supporting raw processing power. In the early years of Bitcoin, 2009-2010, an ordinary CPU and GPU might be used to solve the SHA-256 puzzle, but over the past few years the difficulty level of the algorithm puzzle has increased significantly, forcing miners to use Application Specific Integrated Chips (abbreviated as ASIC), a high-level processor needed to calculate the bitcoin exponential increase. While scrypt only supports the amount of RAM and parallel processing capabilities, this is the main reason why the cryptocurrency rig still exists in a scrypt niche. Scrypt-based puzzle difficulty levels have not surged drastically as has been the case with bitcoins. For many beginners, this type is a favorite since they do not have to provide too expensive resources.

The Right Rig

How to realize the right rig? It all depends on the budget and the type of currency you want to mine. There are two types of rigs you can use; DIY rig and ASIC. ASIC can be very expensive and if you live outside the United States you may experience difficulty in providing this resource. Although the DIY rig is cheaper it can provide its own advantages as you can do CPU and GPU mining at the same time.

Cryptocurrency Calculator

What is meant by cryptocurrency calculator is a function to take a cryptocurrency at a certain time to then converted to certain conventional currency? Every serious miner is advised to have their own cryptocurrency calculator since they can know firsthand the value of their mine. If we do not know the real-time price of our mining results then we will not know the progress of the mining business we have done. Hopefully, by reading this article you can better understand how the world of cryptocurrency works and what you have to prepare for mine.

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