SAN DIEGO (KGTV) — From his home office in North County, David Berry launched an experiment.
He bought a new laptop, watched a few YouTube videos, and then embarked on his first attempt at mining cryptocurrency. The newly married father wanted to see if he could learn the technical skills necessary for the mine, and perhaps earn some money on the side.
“It’s always something you hear about, but I didn’t understand what the process entailed from a technical standpoint,” he said. “It was a lot easier than I actually thought.”
As of this week, cryptocurrencies are worth more than the economies of most countries, ranking 15th in terms of GDP, just ahead of Mexico, according to CoinMarketCap.com. As interest in digital currencies has exploded over the past few years, interest in mining has also exploded.
To explain what mining is, Polyswarm CEO Steve Bassi likes to use an analogy. “I guess you went to buy coffee this morning, didn’t you?”
When you buy coffee with a credit or debit card, Visa or Mastercard charges the seller a small transaction fee. These fees encourage world visas to continue the work of processing transactions.
Instead of giving these fees to Visa or Mastercard, in the cryptocurrency world, network transaction fees are distributed to miners, Bassi explained.
Miners are computers that use mathematics to process financial transactions between parties and verify them as legitimate. The technology that makes all person-to-person transactions public is called a blockchain. A blockchain is just a huge ledger of money that changes hands, similar to a bank statement, but the ledger is open to anyone.
The unit of money that changes hands on a given blockchain is cryptocurrency, such as Bitcoin or Ethereum.
“Cryptocurrency and blockchain mining is that incentive to keep mining the blockchain. It’s that incentive for all those computers running Bitcoin or Ethereum software to keep that ledger both reliable and moving forward, which means accepting transactions,” Bassi said.
The point of all this technology is to allow money to change hands without a centralized bank and to unlock new ways of doing business. Polyswarm has a blockchain dedicated to cybersecurity. Its platform allows companies to outsource their virus protection to a swarm of IT professionals around the world.
Keeping all of these blockchains afloat requires a lot of computing power, so the people who mine are rewarded based on how much processing power they bring to the network.
Using a standard Macbook Pro laptop, Berry provided relatively little processing power to the Ethereum network. “I made maybe a little over a dollar in mining,” he said. “It’s really not about the money. It was more about trying to understand what this process is and learning a bit more about cryptocurrency in general.
Berry estimates that he collected $0.01 to $0.02 per hour of computer time. Even in a solar-powered home, he says the cost of electricity in Southern California makes small-scale mining largely unprofitable.
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What Does It Mean To Mine Cryptocurrency? – Tech Tribune France
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