Crypto mining is an important and necessary layer to the crypto world. Crypto miners help secure, validate, and record all transactions on the network. The crypto mining ecosystem continues to grow every year and as this growth continues, the cryptocurrency network becomes more secure. Viridi believes that crypto mining is an essential, yet misunderstood aspect of cryptocurrency.
When people think of mining they tend to think of pickaxes and dirt, however crypto mining is very different from traditional mining. Crypto mining is a process involving high-powered computers that solve computational math problems that can not be done by hand. Crypto mining operations ran today by large companies exist within data centers or storage containers, each packed full with hundreds of computers running and processing math problems.
Crypto miners are a core component to overall network security and transaction processing. Upon completing a problem, a miner has essentially validated and recorded transactions for the entire network. Miners are rewarded for their contribution through transaction fees and mining rewards which are paid out in cryptocurrency. For example, securing and validating the bitcoin network as a miner will reward you with bitcoin. Miners are essential to the ecosystem and upon completion of a problem they are rewarded with “mined” cryptocurrency, hence the name.
In many networks, miners can be any person on the planet. There are no formal requirements to mine and as such, this creates a scenario where the system is decentralized. Crypto miners validate transactions by reaching a consensus of 51%, however this can create a risk that if any individual or group owns 51% or more of the network, they can create a fraudulent transaction. Those who provide more compute power to the network and as a result solve more math problems, are rewarded at a higher rate.