People on the front end of technologies have been working with cryptocurrency. Since Bitcoin started the crypto revolution, those in the know in technology of have been accumulating it and mining for more. The value of bitcoin has continued to rise through the years and seems like it’s perpetually reaching new highs.
What’s so incredible about cryptocurrency is that for the longest time, it was thought that it wasn’t possible. Many people looked into attempting to run a decentralized currency. However until Bitcoin was invented, it just wasn’t possible. Now cryptocurrencies continue to be invented and developed. Crypto is on the lips of every single investor out there and it’s not going away anytime soon.
Cryptocurrency transactions are not centrally confirmed. The confirmation is completed and approved by computers that are working to perform incredible computational feats. Since cryptocurrency is not run through a centralized server, the database is copied to every member of the peer to peer service. All of the various peers will authorize the transaction.
Each transaction is completed when a crypto miner finds the link between the transaction and the currently existing blockchain. The transaction is added to the blockchain and can never be changed. The miner who found the mathematical solution to do this is rewarded with some cryptocurrency.
In the early days of crypto mining, most people were able to do so just by using their CPU and GPU power. In fact, GPUs were more efficient than a CPU. This led to many people purchasing additional GPUs so that they could run quicker computations and hopefully complete the transaction, thus allowing for the reward of cryptocurrency for completing the transaction. This made the public function as a centralized bank authorizing transmissions. This also led to security. The decentralized transactions list ensured that one copy being manipulated couldn’t result it fraud.
Bitcoin specifically (and most cryptocurrencies since) work on the concept of releasing a limited amount of currency with each blockchain. The diminishing return on bitcoin ensures that as it becomes more popular, there’s going to be more demand on less resources. It will continue to be sought after and hold its value as it becomes harder to get. Therefore there’s going to be more competition for the currency that’s available.
Miners will continue to come up with more sophisticated mining rigs that will attempt to be the first to solve the complicated mathematical algorithms created with each transaction before it’s added to the blockchain.
People recognized the potential value of mining cryptocurrencies, especially bitcoin. This led to things getting competitive. Rather than using home PCs using the CPU and GPU, people would link together many multiple GPUs so that they could function as a sort of home made super computer.
Unsurprisingly, as people realized they could make money by harvesting cryptocurrencies, better technology was created specifically for mining. More recently, the Application-Specific Integrated Circuit was created specifically to assist with mining. This mining specific circuit was designed specifically for this singular task. The development of the ASIC essentially removed the opportunity for people to use home gpus to mine bitcoin. Running ASICs are now essentially the only way to mine. Any other combination of GPUs or CPUs or even older ASICs doesn’t produce enough results to even pay back the costs of the energy they need to complete the tasks.