The Incredible History Of:

Creating a connection between finances, and asset management of digital property to a decentralized world that wasn’t overlooked by a major organization was the next step, especially for developers who owned an estate in servers and GPUs, to make use of the act of mining something in the scene of cryptocurrency.

In our modern day, it’s safe to say that there are a multitude of applications such as mining software, developed by third-party sources, that drive the momentum of crypto mining. There are a lot of them to mention, but for now, the core focus is on the well known ones such as Hut 8, Marathon Digital, or even Riot Blockchain.

In order to understand how crypto mining works, it’s essential to get an idea of what is required to make it all take place to begin with. To mine cryptocurrency, you need a sufficient use of energy and power, and in addition to that requirement, a hardware GPU capable of running the interface needed to run the code that will solve the algorithm once a Proof-Of-Work process has taken place, an SSD that will speed up the process of storing and processing the data, and as the key part of the process, something called an ASIC or application-specific integrated circuit.

Since the person reading this already fit most of the requirements, I will get into the discussion of what ASIC mining technology is for, but before that will try to emphasize on how transactions are processed to begin with on the network.

Like every technology in computing, there is an input and an output, which in this case comes to the transactions and the amount that is transferred between what goes in and out of the machine. Of course, due to a coding defect or mishaps in security, cryptocurrency does not function like traditional currency, it is based on the premise of being fully virtual, at which unless without confirmation there is no reversibility of the finances since an organization like a bank is not overlooking what is happening.

So in this case, you’re working to mine a random supply of coins verified by either a random chain of people through a Proof of Work mechanism, or by the Proof of Stake method. With various technologic elements included, such as the time and speed of the ongoing transaction, the power of this concept relies on the use of internet, the only element of the decentralized network at which an organization has some kind of power. Mining currency unlike putting your money into, acts as the reward system of the technology.

With the use of a particular algorithm that works under the process, called the SHA-256 hash algorithm, this helps to drive a process at which a 256-bit number generated by the user once a transaction has gone through takes place. Like all verification processes, there is a chain with a genesis block that takes place to help all of the validation of data run through smoothly dependant on the WiFi speeds and so on.

All of these processes together, help to make sure the crypto miner is able to solve mathematical problems that will in turn help them to retain a certain level of currency ranging anywhere from Bitcoin to Ethereum, which is almost like mining stocks. Whatever you receive still fluctuates or goes down in value depending on whether or not it’s an altcoin or stable coin that you’re mining, the mathematical problems set in place that will reward you with them are built under the magnitude of the SHA-256 algorithm, at which anyone who is able to find a particular hash value within the network is instantly rewarded with cryptocurrency. This process of finding a hash value within the algorithm makes it so that once it’s found through rounds of inputting the data of a particular user by converting it to a binary (1s and 0s), chunking the data into bytes of information, and then creating a loop of a final values that will ultimately help to secure the string of numbers that will remain fixed in its amount of digits regardless of how many times it changes over the course of the transactions that take place.

Keep in mind that, I am only speaking of Bitcoin, as other currencies such as Ethereum apply to different hashing algorithms such as Ethash, with various more belonging to different algorithms.

Altogether, you are finalizing a network of validation to complete towards the search for a hash value that will secure the next block in the algorithm, verifying and opening up new nodes for users to take their currency, and to ultimately reward the user in return. Now that you have a basic idea of what the process of crypto mining looks like, at which you’ve likely also realized that costs aside, the reward is designed for expanding a network by contributing your own personal power, the particular machine involved in this case being the ASIC is specifically involved in helping to drive this power.

Application-specific integrated circuits, are a more expensive technology used in mining cryptocurrency, that differs from the use of GPUs when performing the same task. To simply put, it consumes a lot more energy and is specifically focused towards mining Bitcoin or Litecoin. In case you haven’t heard of Litecoin after watching my previous workshop on the historical timeline of Ethereum, it is specifically a fork of Bitcoin, or an altcoin like its predecessor that has a differing value but works in about the same way in terms of use of power.

Under today's conditions, you do not need an ASIC machine to mine cryptocurrency, as a GPU is already the cheaper option that comes with your desktop, that can enable such a procedure to exist. But it is important to mention the technology that goes behind this process, as there’s another step to this mining process, which is protecting against security. In a previous workshop, I went over how there’s risk in cybersecurity behind any blockchain-related process, as the use of ISPs that aren’t on the network immediately open up vulnerabilities, at which the mining-specific issue is something called cryptojacking or timejacking.

All of the transactions recorded by each separate hash identifier within the algorithm, creates a particular tree of input and output in data facilitated by these varying algorithms called a Merkle tree. Ever wondered why the network itself looks like one big tree without a particular root taking place? That’s exactly what a Merkle tree is, it’s essentially an infrastructure that streamlines the confirmation process of transactions from within each block, ultimately creating arrays of records within parallel networks, leveraging Bitcoin miners to use software-specific solutions that will help to mine the currency through third-party sources built initially on the platform, to collectively drive integrity and security for those rewarding from the process.

Now that this has been mentioned, the Merkle tree falls to the risk of cryptojacking, at which the hacker tries to purposely introduce malware such as Trojan viruses into already existing code repositories on the network, implementing packages that target developers that have working programs within the decentralized cloud, ultimately creating a ripple effect in a network that uses unauthorizing crypto mining resources, allowing the hacker to extract any information they can to later use it to for malicious purposes such as power use and of course mined cryptocurrency.

To simply put, the hacker is disrupting the code within the network, and ultimately demonstrating an attack that causes a wind of pay loads towards their hash numbers once the data is extracted, something powerful that can be exploited as long it’s spotted by the developer. Since a lot of crimes in this generation of developing Web 3.0 activities go untraced, there are quite some examples out there that have been spotted. Some are companies such as Sophos, which are responsible for employing a serves called VMWare Horizon, a virtual machine product that helps one to work between multiple clouds for their own business, found that cryptojackers had infiltrated their databases under their Lunix-based system infrastructure, by using a particular software called XMRig, notable as being a piece of software unlike the kinds of I’ve mentioned before that is used specifically for security intrusions. It was ruled that this was for typical reasons that a hacker would want to disrupt the process of crypto mining for, which is for thieving computing power from companies, and also using their own technology to potentially earn their currency through the use that energy or mining data.

As you can see, there is a balance between what mining software is used for the SHA-256 algorithm, and the kind used to develop malware under those same systems. Altogether, the major conclusion to make here regarding crypto mining is that, there has never been a more collaborative way for people around the world to be rewarded for opening paths that a decentralized network needs. Through contribution, crypto miners are capable of opening new blocks for users to join in on, not only proving that governance exists through Proof-of-Stake mechanisms in the network through the ownership of cryptocurrency either purchased or mined to expand security and power efficiency, but also shows that a reward is given for it for those who allow such consensus mechanisms to take place when generating new blocks for the new set of users that will eventually come along the network.