Cryptocurrency mining is the process of verifying transactions and adding to the blockchain digital ledger. It is performed to discover digital coins. The mining uses the proof-of-work system where crypto miners compete to crack the code of the block containing the transaction. To be rewarded, a miner has two tasks - validate 1 MB worth of transactions and be the first to guess the 64-digit hexadecimal number (hash). The miner who first does to the work is rewarded with a small fraction of the currency.
Cryptocurrency mining limitations
Many digital currencies have imposed a limitation on their mining
- To avoid inflation in the supply.
- Once the limit has reached, mining a new block will not generate any currency at all. Bitcoin is among one of these.
- It is not possible to generate digital currency on any CPU due to the enormous energy power required.
- Mining requires a pool of miners to maximize profits.
