In today’s guide, we will be explaining what hard drive mining is and what processes are involved when creating new cryptocurrencies through this alternative method.
What Is Crypto Mining?
Cryptocurrency mining, or cryptomining, is the process of validating the transactions that are made using a certain cryptocurrency before they are added to the block of the digital ledger.
A cryptocurrency miner verifies the authenticity of the transactions and updates the blockchain with the transaction. Cryptominers compete to solve complicated mathematical equations using cryptographic hash functions, as the first miner who cracked the code gets to authorize the transaction. In return for this, he is rewarded with a small amount of the new crypto.
Depending on the mining protocol, the miner will require specialized hardware to perform the validation of transactions.
A blockchain protocol, also known as a consensus method, is a system that manages how consensus is reached and validates transactions within a blockchain network.
There are various types of protocols, some requiring physical mining equipment, while you just need to hold the coins in an active wallet.
Proof of Work
Proof of Work is a mining protocol, which is also used by cryptos, such as Bitcoin, that requires a lot of mining power in order to compute the algorithms. Such type of mining requires setting up physical hardware rigs made out of ASIC miners or graphic cards, depending on the mining difficulty of the network.
Proof of Stake
Proof of Stake does not require physical hardware; instead, producing new coins through staking, a process in which network users hold their coins and leave their computer on. Staking rewards are new coins generated by minimum computing power.
Proof of Capacity
Proof of Capacity is a consensus algorithm which instead of using ASICs computation to verify transactions, makes use of hard drives and storage. This is why this consensus model is used for hard drive…