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What Is Cryptocoin Mining?



Overview and SHA-256

Bitcoin Mining is the in essence, the completion of mathematical equations by hardware (asics, GPU's, or CPU's). Bitcoin (and other currencies) are found in a block, each block contains a set amount of coins. When the block is solved, you are given the amount of bitcoin that is calculated through "proof of work". Depending on the "difficulty" of the shares you submit, as well as the amount can determine higher or lower payouts.

Now, since the difficulty for bitcoin has exploded, obviously a GPU or CPU won't be fast enough to really earn you anything. This is where the almighty ASIC comes in, an ASIC is a application-specific integrated circuit, which basically means a chip that is programmed to complete a specific action. Once you have some form of worker(Any of the above hardware) you can hook into a pool of your choice, they have varying fees and pool size. The pool pays the worker out due to how much proof of work/accepted shares they have and the difficulty of said shares. There is some luck involved as to who finds a block quickest and so on.

 Here's a short video that describes the process very well.



Scrypt

Scrypt is not a whole other ball game, it can be mined by the GPU's and CPU's you could use before but now that ASIC we know is APPLICATION SPECIFIC, we must realize that those ASICs used for bitcoin mining (or SHA-256) can't also be used for scrypt. To use an ASIC for scrypt mining (things like Litecoin, or Doge ETC), you need to purchase a ASIC miner that is created to mine with the scrypt algorithm. 

For some in depth looks at things in the bitcoin community and companies you should look into just starting into the industry, check out my other posts!
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Location: Toronto, ON, Canada

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