Steemit Crypto Academy Contest / S9W5 - "Cryptocurrency Mining"

Greetings! I hope you all are fine. This is my entry post in this wonderful Community. Topic for this week is very informative. Thank you Steemit Crypto Academy for organizing this contest about "Crytocurrency Mining". Mining always play an important role in generation of new coins and validating transactions on Blockchain. Mining always prevents from double spending within distributed network. Let's start properly.

1 ) What is Cryptocurrency Mining ?

Cryptocurrency Mining is a process of verifying and adding transactions. It also refers to generate new units of the Crytocurrency. It is fundamental mechanism for the security and integrity of decentralized currencies like Bitcoin. Mining was primarily associated with Bitcoin. But as the popularity of Cryptocurrencie grew up some other currencies also adopted mining for generating new coins and validating transactions such as Ethereum , Litecoin , Montero.

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A miner utilizes powerful computers or mining graphic cards just to solve computer mathematical puzzles. Nature of these puzzles is cryptographic. These puzzles are involved in finding a specific Hash value that meets the specific criteria. So in this regard Miners compete with each other to solve these puzzles . The first miner who find the valid solution is rewarded with specific amount of newly mined cryptocurrency.

2 ) How does it work ?

The cryptocurrency mining process serves multiple purposes such as it validates and verifying transactions and add them in blockchain distributed ledger and also uphold the security of decentralized blockchain. Becuse this prevent the double spending where same digital currency is used for multiple transactions. It also secures the network by making it computationally expenses with transaction history. It acts against fraud and manipulation. It would require an immense amount of computational powers to alter past transactions.

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Mining pool has also significant in mining. Individual miners join mining pool where they combine their computing power. They share the rewards based in their contribution. So in this way less Powerful graphic cards are allowed to participate. Cryptocurrency mining works on a specific set of principles and processes. Transaction Verification, Hashing , Proof Of Work (PoW) , Difficulty Adjustment and Finding the Solution , Block Validation and Reward and Consensus Mechanisms.

3 ) Can Steem Token Be mined ?

As we know STEEM is the native token of the Steem blockchain and it operates on a different consensus mechanism that is known as Delegated Proof Of stake (DPoS) . In DPoS STEEM tokens are not mined in the traditional way. STEEM Tokens are distributed through a process called " Witness voting" & "delegated proof of stake ." Witnesses responsible for validating and producing blocks. So I would say that No , STEEM token can't be mined like traditional Cryptocurrencie such as Bitcoin and Ethereum.

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STEEM token were intialy distributed by a process that is known as Proof of Brain PoB). It's a mechanism in which users earn Steem Tokens by creating and curating content. So , Now Steem Token can't be achieved through Mining. It's primarily driven by Participation of users and Engagement within platform. In a nutshell, STEEM Tokens are archived through witness Voting and delegating stake in the Steem network e.g DPoS.

There are several types of mining methods that are bases on specific Cryptocurrency and here are some mining methods for Crytocurrency. Each method has its own advantage and specific requirements :

• Proof of Work (PoW)
• Proof of Stake (PoS)
• Proof of Capacity ( PoC)
• Proof of Elapsed Time (PoET)
• Delegated Proof Of Stake ( DPoS)
• Proof of Authority (PoA)

To be very honest , I have not been involved in cryptocurrency mining. The main reason is legal Restrictions. Crytocurrency Mining is banned in our country Pakistan. The second reason is lack of mining equipments and and high costs mining rigs. So therefore , I have not been involved in mining.

Cryptocurrency Mining has several benefits and significance. Here are some Importance and benefits of Cryptocurrency Mining.

• Mining plays a fundamental role in validating and securing cryptocurrency transactions. Miners prevent from double spending and verify the athenticity for the security and integrity of Blockchain.

• Mining allows for the generation of new coins. Miners also rewarded by newly mined coins when they solve mathematical puzzles and eligible to find any valid solution. They are rewarded whey they are succeeded in mining new blocks.

• Mining serves as incentive Mechanism where miners invest computational power , electricity and mining rigs. And they can earn reward un the form of newly minted coins. This mechanism is highly important for the security of Blockchain.

• Decentralized nature is also very important. Cryptocurrency mining contributes towards the Decentralized nature of Blockchain. It prevents from any single entity or authority so it also enhanced the security.

• Miners are always ready to find powerful hardware solutions to improve mining capabilities. It directly leads toward technological advancement.

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• High energy Consumption is the challenge that cryptocurrency mining has to face a lot. Mining in Proof of Work (PoW) system demands high consumption. When mining is conducted on large scale high energy or electricity is required.

• Cryptocurrency Mining demands specialized Graphics Cards or hardware such as ASIC miners which is very expensive. So cost of equipment and maintaince are also challenging for miners.

• Intense Competition is also challenging for Miners. Because when number of miners increase so they can reduce profit of individual mining. Crytocurrency Mining faces several challenges in mining. These Challenges highlights it's dynamic nature . And also make harder to earn reward. When there are several miners to solve the complex mathematical puzzles the competition has intensified and reduces the profit.

• Cryptocurrency mining operates always in regulatory landscape that vary from country to country so they have specific licensing and regulations requirements for mining operations. As my native country , Pakistan has imposed Restrictions on mining.

• Cryptocurrencie prices are volatile and it's directly impacts in mining profitability. Fluctuations coin prices effects on investement and it makes harder and complex to predict future earnings accurately.

Cryptocurrency Mining plays an important and fundamental role in the world of cryptocurrecies. It acts as a backbone for transaction validation , security and generation of new coins. Mining is totally dynamic and impactful process.

Now I would like to invite my friends @patjewell , @goodybest , @suboohi , @waterjoe , @josepha and @shahid2030 to take part in this contest. Thank you for reading my post.