What is EOS?
Discover EOS Coin, an open-source platform developed to address issues associated with Ethereum, EOS is one of the cryptocurrencies that has been standing out lately and has a market capitalization of over US$ 4 billion.
EOS is often viewed as a major rival to Ethereum because it provides similar solutions. With its speed, scalability, and low fees, EOS holds advantages over Ethereum in areas that the latter still needs to enhance.
EOS analysis
EOS is a blockchain-based platform with the main objective of ensuring the development, deployment, and execution of various decentralized applications on a commercial scale.
With reliable access and secure operation of dApps, EOS has attracted various developers. This is because the project presents uncomplicated use and makes the network easier to use than its competitors.
When compared to Ethereum’s blockchain, its features stand out even more, as EOS is capable of processing cryptocurrency transactions much faster.
In addition, it also seeks to improve the experience of both the user and companies, generating greater security for the former and acting more flexibly for the latter.
Who are the Founders of EOS?
Daniel Larimer and Brendan Blumer co-founded Block.one in 2018, the company responsible for EOS. Larimer, one of its co-creators, has a notable presence in the crypto world. Before EOS, he contributed to the founding of Bitshares and Steemit.
Additionally, he played a pivotal role in developing the DPoS (Delegated Proof of Stake) consensus mechanism, which we’ll delve into shortly.
How does EOS work?
Operating on the DPoS consensus, EOS requires just 21 individuals to validate the platform’s transactions.
The community elects these 21 validators, who rotate daily, enhancing the system’s security for all users.
Understand more about how EOS works below.
EOS Flexibility
EOS is a very democratic and much more flexible network than others. This happens mainly because of its ability to freeze a problematic dApp, without affecting the rest of the network.
This is one of the points that stand out most in front of Ethereum, since the competitor had to stop its operations when it suffered a hacker attack in 2016 and that resulted in its hard fork at the time.
Because of this flexibility provided by the DPoS system, the community that operates on EOS can, actively, upgrade, downgrade and correct the bugs that eventually arise. And all in a safe and democratic way.
Development and community
Officially launched in April 2018, EOS has always had a very active and participatory community in Facebook, Telegram, and Twitter groups.
During the development of its blockchain, the community contributed many features, including resource tracking and inter-blockchain communication.
Currently, the network operates as planned and already has more than 100 dApps in its system.
EOS Token
Its native token is homonymous to its network (EOS) and is fundamental to keep its operation in an adequate way.
Its existence serves to reward transaction validators, as well as for dApp developers to generate their own EOS tokens and remunerate users.
Another very pertinent functionality for those who are holders of EOS cryptos is the power to participate in the voting of block validators. Whoever has the largest number of tokens also has the greatest power of influence within the network.
The advantages of EOS
EOS boasts two primary strengths:
- Absence of transaction fees: due to the use of an ownership model, you can use the network resources that are equivalent to your participation, which allows you not to pay for all your transactions made.
- Scaling: the operational power of EOS allows millions of transactions to be made per second, a great differential compared to other blockchain projects.
- Decentralized operating system: with this type of system, EOS token holders can be part of the network in proportion to the coins they own, that is, they do not need to pay a transaction fee that is required by other networks;
- More popular DApps: the dApps built within EOS are more popular than those located on other networks, and can be built more easily;
- Smart contracts: it is possible to execute smart contracts within EOS, which further expands its functionalities;
- Facilitated validations: due to the DPoS consensus, transactions carried out within the protocol are more agile;
- Internal structure: because its network is more flexible, a hard fork is not necessary when some kind of hack happens.
How is the EOS network Secured?
The most known transaction validation processes in the cryptocurrency market are Proof of Work (PoW), used by Bitcoin and Litecoin, and Proof of Stake (PoS), used by Chainlink and Cardano. However, the consensus used on the EOS network is a little different.
In the Delegated Proof of Stake (DPoS) system used by EOS, 21 daily representatives validate transactions. These representatives actively participate in the process. Notably, these 21 individuals change regularly, enhancing the network’s security for all users.
How much is 1 EOS worth?
The EOS ICO (Initial Coin Offering) was US$ 4 billion, which allowed the supply of a total of 1.02 billion tokens.
Currently, there are approximately 1 billion EOS coins in circulation and each one is worth US$0.7459
How and where to buy EOS?
While EOS currency initially existed solely to support the network’s operations, it evolved into a crypto asset and started trading as a valuable commodity.
To buy EOS is very easy: you need to have an account on some exchange that works with crypto, as this is the safest way to invest in it.
Final Thoughts
To make a sound decision for your next cryptocurrency investment, we invite you to explore our education page, where you can learn more and find a crypto coin that aligns with your investment goals.
What is Ripple?
The payment platform known as Ripple was developed by Ripple Labs, and its native cryptocurrency is XRP. It’s critical to comprehend the fundamentals of Ripple as the use of digital currencies increases.
Ripple Labs is a venture capital company with headquarters in San Francisco, California, that creates international payment solutions for financial institutions.
Ripple analysis
A platform for making payments between people and financial institutions that are quick, safe, and affordable. With XRP serving as its native cryptocurrency, Ripple integrates interbank systems with blockchain technologies. It is distributed and managed by Ripple Labs.
An open-source distributed payment mechanism is ripple. Its mechanism, the Ripple Transaction Protocol (RTXP), sometimes referred to as XRP, is what sets it apart most from other blockchains.
Ripple is a network for remittances, foreign exchange, and real-time gross settlement. It is, in other words, an idea that goes beyond a typical cryptocurrency.
What is the future of XRP?
XRP could reach an average price of US$0,54 by 2025 (with a minimum of US$0,52 and a maximum of US$0,58), according to market analysts’ projections. For the second half of 2023, the forecast is for the price to hit US$0,16. Projections may differ if the market experiences a decline.
Like other cryptocurrencies and fixed and variable income investments, the return is expected in the long term. The price of XRP could rise to US$1,33 over the next 10 years.
When does the Ripple lawsuit end?
The Ripple lawsuit should end in 2023. The Securities and Exchange Commission (SEC) accuses Ripple Labs of selling XRP as an unregistered security. The legal dispute began in December 2022, in the United States.
The SEC is an independent U.S. federal agency that regulates and controls the financial market.
In the lawsuit, the Securities Exchange Commission alleged that Ripple offered investment from its token, with a forecast of future gains. Ripple reportedly raised US$1.3 billion through XRP trading.
Why is Ripple’s currency rising?
The anticipated legal victory over the SEC in 2023 fuels optimism among investors, causing XRP’s value to rise by 9.4% recently. The more large financial organizations adopt the Ripple project, the higher the likelihood of XRP appreciating.
How did Ripple Labs come about?
Developer Ryan Fugger initially created RipplePay, a peer-to-peer payment network, in 2004. Jed McCaleb, Chris Larson, and Arthur Britto later developed the current Ripple protocol based on Fugger’s ideas.
Jed McCaleb, a digital currency expert, previously worked with Mt. Gox, a major Bitcoin trading platform. Chris Larsen co-founded and led the digital financial company E-LOAN, while Arthur Britto serves as the president and board member of fintech company PolySign.
How to use Ripple?
You can use Ripple for instant, secure, and nearly free payments. To buy XRP, you’ll need to register on exchangers—platforms that facilitate cryptocurrency trading.
XRP enables tokens that represent a variety of forms of money, including fiat money, gold, and other cryptocurrencies.. Since February 2018, Remessa Online, the first in Brazil, has utilized Ripple’s blockchain network for quick, low-cost international remittances.
Even while its centralization has drawn criticism, Ripple continues to draw in investors and businesses looking for effective transnational money transfer solutions.
Be sure to do your own study and thoroughly balance the pros and cons before deciding to adopt Ripple and XRP.
Final Thoughts
To make a sound decision for your next cryptocurrency investment, we invite you to explore our education page, where you can learn more and find a crypto coin that aligns with your investment goals.
What is Ethereum?
Ethereum, like Bitcoin, is a blockchain that allows the transfer of cryptocurrencies between individuals without the need for a third party – such as a bank or international remittance company – to secure the transaction.
Moreover, it is also a programmable platform where developers can create decentralized applications (dApps) from various sectors, such as finance, media, and games.
This is possible because the network operates through smart contracts, a technology that is revolutionizing the market.
In practice, these contracts are computer programs that execute pre-established rules in an automated way. An example is a loan. A person could lend values to another without the need to resort to an entity to guarantee the transaction – all terms and conditions could be programmed.
Ethereum kick-started the emergence of a new digital economy, with new crypto assets, Decentralized Finance (DeFi), Initial Coin Offerings (ICOs), Non-fungible Tokens (NFTs), and metaverse games, such as Decentraland (MANA) and The Sandbox (SAND).
How and when it emerged
Ethereum was conceived by Russian-Canadian programmer Vitalik Buterin in 2013. Buterin’s relationship with cryptocurrencies, however, began a few years earlier.
He came across Bitcoin in 2011, while he was “looking for meaning in life,” he wrote on his blog. Initially, despite understanding programming (his mother is a computer scientist), he couldn’t see much value in Satoshi Nakamoto’s idea, the pseudonym of BTC’s creator.
After a while, however, he was hooked by the technology and began to get involved in market projects. In 2012, he co-founded Bitcoin Magazine, a site specialized in BTC coverage. That same year, he enrolled in the computer science course at the University of Waterloo, Canada.
In 2013, Buterin left his degree and traveled the world to meet people who were working with cryptocurrency. It was in these meetings with industry experts that he realized it would be possible to use Bitcoin’s blockchain not only to transfer money over the internet without the intermediation of third parties but also to decentralize other segments.
In November of that year, using BTC’s code as a basis, he published the initial white paper of the project. Several people became interested and offered to collaborate, including computer scientist Gavin Wood, who co-created the project alongside him. In July 2014, to raise money and effectively kick-start Ethereum, the platform launched an ICO, managing to raise $18.5 million in just over a month. However, it wasn’t until July 2015 that the blockchain came to life.
Differences between Ether and Ethereum
Ethereum is the blockchain that allows the creation of apps and the transfer of digital assets. Ether, on the other hand, is the native cryptocurrency of this network and the “fuel” of the entire system.
If a programmer generates an application, they need to pay the network usage fees – called gas – with Ether. Similarly, if a user wants to send a cryptocurrency to another, they must also bear this fee, which is not fixed.
Just like in Bitcoin, it is the miners who keep the system standing, validating the transactions. In return, they receive rewards in Ether.
ETC and ETH
In June 2016, a hacker managed to steal $50 million in Ether from a decentralized application built on the Ethereum network. After the virtual theft, the blockchain’s developers gathered, debated, and decided to restore the network to recover the lost ETH. Not everyone, however, was in favor of the idea, and the platform was split in two.
The blockchain updated to the version prior to the theft kept the name Ethereum (ETH). The “original” blockchain, with the record of the million-dollar embezzlement, was renamed Ethereum Classic (ETC).
Forks due to disagreement among participants are common and constant in the cryptocurrency universe. The jargon used for this is “hard fork”. BTC itself has gone through some, giving rise to new digital assets, such as Bitcoin Cash (BCH) and Litecoin (LTC).
Ethereum 2.0
Ethereum 2.0 is an update to the project’s blockchain. The goal of this change is to increase the scalability, speed, and efficiency of the network, which often gets congested and has expensive fees. The change is being made in stages, and the main change will occur in the system’s mining mechanism (the process of validating and creating new cryptocurrencies).
Today, Ethereum uses the Proof of Work (PoW) protocol, the same one used by Bitcoin. This algorithm requires miners to put computers to solve mathematical problems and validate transactions. The one who finds the solution first wins cryptocurrencies as a reward. This format is criticized because it generates high energy consumption.
During the update, Ethereum will replace PoW with a mechanism called Proof of Stake (PoS), which dispenses with miners. According to the rules of this new protocol, any network user with 32 ETH deposited in a specific smart contract can help validate transactions on the blockchain. On December 22, 2020, this amount was around $128,000.
The first phase of Ethereum 2.0 was implemented on December 1, 2020. In summary, the developers created a blockchain called “Beacon Chain”, which already has the PoS mechanism in its code, and put it to “run” parallel to Ethereum’s main network.
To force current miners to adopt the new format, Ethereum had the idea of implementing a mechanism called “difficulty bomb” in the code of its main network, still in 2022. In practice, this bomb requires greater computational power to mine ETH, reducing the profitability of the business.
Finally, the last stage of the update is the creation of “Shared Chains”. In this phase, the programmers subdivide Ethereum’s main network into 64 chains. The goal, according to Ethereum.org, is to reduce the protocol’s congestion and increase the number of transactions.
How to mine Ethereum
Mining is the name given to the process of validating and including new transactions in the blockchain. Those who carry out this activity, done through computers, are the miners. As a reward, they receive new cryptocurrencies. To participate in the process, it is necessary to acquire PCs with powerful video cards. As mining involves solving mathematical calculations, the greater the computational power, the greater the chances of being able to validate transactions and get cryptocurrencies.
After buying the equipment, it is necessary to connect to a mining software. In summary, it is a program installed on the computer that controls the entire process of validation and manufacturing of new coins. Some examples are the following: EasyMiner, CGMiner, and BFGMiner.
Finally, it is also essential to have a cryptocurrency wallet. Wallets are software or physical devices that give users access to these digital assets stored in the blockchain. In addition, they also allow the sending of digital currencies without the need for intermediaries.
It is important to reinforce, however, that after the update to Ethereum 2.0, the way to mine Ether changes, and PoS becomes valid. After the network’s “upgrade”, only the user who deposits 32 ETH in a specific contract can receive rewards in cryptocurrencies.
Diferenças entre Ethereum e Bitcoin
The world’s two leading blockchain platforms differ in several ways.
Issuance
According to Bitcoin’s protocol, only 21 million units of the cryptocurrency can be mined. As of July 26, 2023, according to CoinMarketCap, 19.4 million BTC were in circulation. Ethereum, on the other hand, has no issuance limit. On the same date, 120.4 million ETH were available on the market. Therefore, unlike BTC, Ether is not scarce.
Smart Contracts
Bitcoin is a system that allows the transfer of value over the internet without intermediaries, such as banks or international remittance companies. Ethereum is also a decentralized tool for transferring value. However, it took a technological leap by also allowing the creation of smart contracts and decentralized applications on its network.
Consensus Mechanism
Both projects use PoW as a consensus mechanism, criticized for generating high energy consumption. However, Ethereum is in the midst of a transition to PoS, a more environmentally responsible protocol type.
Speed
A transaction on the BTC network usually takes 10 minutes to be verified and confirmed by miners. On Ethereum, on the other hand, this happens in less than 20 seconds.
Security
In a peer-to-peer network, as is the case with a blockchain, the larger the number of participants (called nodes), the more secure the system is. BTC, having more users, is therefore more protected than ETH. The first cryptocurrency on the market has also been in circulation since late 2008 and has never been hacked, a fact that demonstrates the robustness of the project.
Where to invest in Ethereum
You can invest in Ether through exchanges, investment funds, ETFs (Exchange Traded Funds), or P2P.
Exchanges
These are digital platforms where you can buy, sell, exchange, and store cryptocurrencies. These platforms usually charge fees for withdrawals and transactions.
Cryptocurrency Funds
These are financial products that pool resources from various investors to invest in certain crypto assets and usually charge administration and performance fees.
ETFs
Cryptocurrency ETFs are investment funds that can be traded on the stock exchange. Managers usually charge administration fees ranging from 0.7% to 1.3% per year. As these products are traded on the exchange, you also need to cover brokerage and custody fees, as well as B3 emoluments.
Peer-to-peer (P2P)
Another way to invest in Ether is by buying the cryptocurrency directly from sellers. There are fees involved, but they are generally lower than those charged by brokers. It’s worth noting, however, that this type of business is usually riskier than the previous ones, as in many cases there is no third party guaranteeing the transaction, which opens up the possibility for scams.
Risks and Advantages
Like any investment, Ethereum presents both risks and advantages.
Advantages
Heated Market – The digital economy, driven by DeFi, NFTs, metaverse, and other technologies, is in full swing, and new projects are launched every day. As many of them are based on the Ethereum network, the platform has a lot of room to grow, and its cryptocurrency can appreciate.
Liquidity – Like BTC, Ether has high liquidity. That is, it can be quickly converted into cash.
Environmentally Responsible – Ethereum is in the midst of an update that will make the project more eco-friendly by using less energy in the mining process. As the environmental flag is flying high, this change could be beneficial.
Speed – Ethereum is often congested, has scalability issues, and tends to charge high fees during periods of heavy traffic. However, Ethereum 2.0 aims to solve these problems, which could further appreciate Ether.
Risks
Volatility – The cryptocurrency market is relatively new and still immature. Therefore, it’s common for cryptocurrency prices to plummet by double digits in a single day, and this also applies to Ether.
Competition – Ethereum is not the only platform that allows the creation of smart contracts and the development of decentralized applications. Projects like Cardano (ADA), Terra (LUNA), Avalanche (AVAX), and Solana (SOL) also have these functionalities. If any competitor stands out, its cryptocurrency could depreciate.
Regulation – The cryptocurrency market has not yet been regulated in some countries. Legislation, depending on the text and taxes created, could affect Ether and the sector as a whole.
Attacks – The Ethereum network, like Bitcoin’s, is secure, but it’s not infallible. The blockchain is susceptible to 51% attacks, which occur when groups manage to gain more than half of the network’s power. Experts say that this type of virtual onslaught would not be financially worthwhile. However, it’s not impossible.
Final Thoughts
To make a sound decision for your next cryptocurrency investment, we invite you to explore our education page, where you can learn more and find a crypto coin that aligns with your investment goals.
What is Bitcoin?
Bitcoin is a form of peer-to-peer electronic money that can be transferred without the intermediation of financial institutions.
In practice, this means that two individuals, even living in different countries, can send BTC to each other without needing a bank or an international remittance company.
Transactions are confirmed on the blockchain, a huge database that records all user trades. This technology was born with Bitcoin, and it works in such a way that the participants themselves are the auditors of the network.
As there is no third party involved, sending Bitcoin from one country to another is usually cheaper and faster than transferring fiat currencies.
BTC is digital, decentralized, and is not controlled by governments, companies, or individuals. Therefore, no Mint needs to print it and no Central Bank has the power to control its price. Its value depends mainly on the law of supply and demand.
When did Bitcoin appear?
Bitcoin emerged on October 31, 2008. On that day, the creator (or creators) of the cryptocurrency, who hides under the pseudonym Satoshi Nakamoto, sent an email to a list of people interested in cryptography. In the body of the message, he wrote that he had been working “on a new fully peer-to-peer electronic money system, without trusted third parties”.
He also inserted a link with the cryptocurrency’s white paper (manual), in English. In the document, with nine pages, Nakamoto briefly described the fundamentals of Bitcoin, based on four main points:
It is a peer-to-peer network to avoid double spending (possibility of sending the same coins more than once); without intermediaries, like banks; allows the anonymity of participants; and uses Proof of Work (a type of algorithm) to generate Bitcoin (process that was named mining) and prevent such double spending.
In the manual, Nakamoto also stipulated that BTC has a finite supply. In total, only 21 million units can be mined (created) until 2140, which makes it scarce. By the end of October 2021, according to the aggregator Coingecko, 18.8 million Bitcoin had already been issued.
Despite Bitcoin being launched at the end of 2008, the first block (name of the file with information about transactions) of the cryptocurrency’s blockchain was only mined on January 3, 2009.
Who created Bitcoin?
The creator of Bitcoin hides behind the pseudonym Satoshi Nakamoto. Who he is, however, still remains a mystery. Some people have come forward claiming to be the character, but no one has actually been able to prove anything.
What is known so far comes from traces of his online life. In November 2009, for example, he launched BitcoinTalk – a discussion forum about cryptocurrency. Nakamoto was very active in the space and, over almost a year, posted about 600 messages. None, however, give concrete clues about his true identity.
His last movement in the forum occurred on December 12, 2010. In the post, he gave some indications about the security of the network. After that, he no longer posted anything on BitcoinTalk. That same year, he also passed the repository with the Bitcoin code to Gavin Andresen, a software developer who was involved in the cryptocurrency project.
At the end of April 2011, in what was his last ‘online appearance’, he sent a farewell email to his close developers. In the message, Nakamoto “passed the ball” of Bitcoin to other developers:
“I’ve moved on to other things. This (Bitcoin project) is in good hands with Gavin and everyone.”
Candidates for Satoshi Nakamoto
No one knows yet who created Bitcoin. However, there are some suspects. On the list are people who collaborated with the project, were close to the creator of BTC – at least in online life or were cited by him. There are also wealthy people capable of influencing the market with just one tweet. Here are some of the candidates:
- Gavin Andresen, for having taken control of the cryptocurrency code and having exchanged messages with Nakamoto, is one of them.
- Another supposed creator of BTC is Hal Finney, who was the first person to receive a Bitcoin transfer from Nakamoto – that was on January 11, 2009. Finney, however, died in August 2014 at the age of 58, a victim of a degenerative disease. At his own request, his body was frozen to be revived in the future – that is if some technology capable of overcoming death arises.
- Computer scientists Nick Szabo and Adam Back, both cited in the Bitcoin white paper, also appear on the list. Craig Steven Wright, a computer scientist and businessman who in 2016 told journalists he was the real Nakamoto (without presenting convincing evidence), is another suspect.
- Finally, Tesla and SpaceX CEO Elon Musk is also in the running. The theory about Musk arose after a billionaire employee, known for influencing the cryptocurrency market with his tweets, said he could have created BTC. The businessman denies.
Difference between Bitcoin and digital currencies
The main difference between Bitcoin, other cryptocurrencies, and Central Bank Digital Currencies is the form of issuance and distribution.
BTC and altcoins are decentralized. That is, there is no government or country in control. The rules, therefore, are dictated by those involved in the projects, as well as by the users.
Central bank digital currencies, on the other hand, are issued and distributed by government bodies. “CBDCs are digital representations of countries’ fiat currencies being controlled by central banks,” explained Ricardo Dantas, CO-CEO of the cryptocurrency broker Foxbit.
In practice, therefore, a digital currency issued by a Central Bank is a virtual copy of the country’s current money. Its value, therefore, is determined by a monetary authority. It is different from decentralized cryptocurrencies, whose prices vary according to the law of supply and demand.
How to Buy Bitcoin
How to Buy Bitcoin There are various ways to buy Bitcoin and other cryptocurrencies. Some of the options include cryptocurrency exchanges, cryptocurrency ETFs, and investment funds.
In the case of a cryptocurrency exchange, you need to choose one and open an account. Typically, they ask for your date of birth, ID, social security number (or equivalent), and address during the online registration process. Some also request a selfie to confirm your identity. There are withdrawal and transfer fees. The minimum Bitcoin purchase investment depends on each exchange. On some, the minimum starts at around $5; others require about $10.
Cryptocurrency ETFs can be traded directly on the stock exchange like a regular stock. Therefore, you need to open an account with one of the many brokerage firms available. The registration also involves submitting personal documents.
It’s important to remember that when buying, you need to pay brokerage and custody fees to the brokers, in addition to the charges from the stock exchange. There’s also a management fee.
Finally, you can also buy Bitcoin through investment funds that allocate resources to the cryptocurrency.
These products can be purchased through brokers or directly from fund managers. There are funds for retail investors, professional investors, and qualified investors – the registration will depend on the option and classification. The minimum shares vary according to the fund and the target audience – in some, it is possible to invest from about $100. As with ETFs, there are some fees, such as the administration fee.
Is Bitcoin safe?
Yes, Bitcoin is safe. Proof of this is that the blockchain, the technology behind the cryptocurrency, has never been hacked over these years of history. And this is mainly due to the mechanism created by Nakamoto, especially two features: consensus and immutability.
“Consensus refers to the ability of nodes, computers or devices connected to the Bitcoin interface, within a distributed blockchain network, to agree with the true state of the network and the validity of transactions. Immutability, on the other hand, refers to the ability of the blockchain to prevent the alteration of transactions that have already been confirmed.
In practice, these two features allow transactions between unknown people to be carried out without the need for a third party – such as a bank or an international remittance company – to guarantee the transfer.
What is Bitcoin Mining?
Think of Bitcoin mining like a big, global competition where everyone’s using their computers to solve complex puzzles. It’s like a race where the first one to cross the finish line gets a prize. This race is happening all the time in the world of cryptocurrencies, and it’s crucial for keeping things running smoothly.
Just like a gold miner needs a pickaxe, a Bitcoin miner needs two things: a computer and electricity. These miners are people who lend their computers’ power to the Bitcoin network. The first one to solve the puzzle gets a reward in Bitcoin. This reward is called a block reward.
Here’s how it works: Miners’ computers are always gathering recent Bitcoin transactions, bundling them into blocks. They then race to solve a tricky puzzle, and the first one to crack it gets to add the new block to the blockchain, the public ledger of all Bitcoin transactions.
Everyone in the network wants to be the first to solve the puzzle because the prize is a certain amount of new bitcoins. Once a miner finds the solution, they tell everyone else in the network. If the solution checks out, the new block gets added to the blockchain.
This whole process is a big incentive for people to participate in the network and keep it running smoothly. But as more bitcoins get mined, the puzzles get harder. This means miners need more powerful computers to keep earning the same amount of Bitcoin.
The puzzle-solving is also a security measure. If someone wanted to mess with the Bitcoin network, they’d need control over more than half of the network’s computing power, which would be incredibly expensive and difficult.
How to mine Bitcoin
Shortly after the creation of Bitcoin, anyone could easily mine the cryptocurrency at home. All it took was to connect a computer (with a reasonable video card) to the BTC network and keep it on to solve complex mathematical problems.
Currently, however, it is practically impossible to “extract” Bitcoin through a common PC. This is because specific equipment is needed for the function.
But it’s not enough to have just one, two, or three hardware. To solve the calculations and take the rewards, you need to have a huge computational power. Today, there are mining farms with thousands of equipment dedicated exclusively to Bitcoin mining.
Given the complexity of the task and the high investment in the business, these mining farms usually organize themselves into pools (sets) of miners who work together to compete for the validation of transactions.
Final Thoughts
To make a sound decision for your next cryptocurrency investment, we invite you to explore our education page, where you can learn more and find a crypto coin that aligns with your investment goals.
