Crypto mining isn’t only a method for making money. Miners have an essential role in the blockchain network. They take care of mathematical puzzles, open new blocks and endorse other users’ transactions in the net. They save blockchain from block fraud as well as hacker attacks, guaranteeing the network’s decentralization.
As we are all aware of the cryptocurrency market decline and how this bear attack is affecting the crypto market. But it not just the crypto market that gets affect, it also affects the miners.
It is the miners who use computing power for approving the transactions and adding them to the digital ledger of activity. As part of authenticating the newest data within the network, the computer systems compete to solve the testing equations. The first miner who cracks the code authorizes the transactions and gets some newly minted digital coins as a reward.
Well, that’s all we see and know. But that’s just a tip of the iceberg. There are lot of things going on in the back-end that we don’t know. Running these systems needs some specialized hardware with a huge amount of electricity, similar to that of a data centre. A lot of commercial cryptocurrency mining operations have been set up in many countries where energy is cheap such as Russia, China, Iceland and Kazakhstan. When it comes to mining cryptocurrency, low temperatures act as a natural cooling system for the rows of whirring equipment.
Once thought to be the domain of tech geeks in their bedrooms, the bitcoin mining market exploded toward the end of last year as the price of cryptocurrency soar, and business people searched out succulent net revenues.
Now, Bear Market Is Taking a Toll!
The bitcoin hash rate, since its peak in August, has dropped more than 40%. This implies that about 1.5m bitcoin mining rigs got shut down since September, as indicated by the market research boutique, Fundstrat.
Also, the mining process carries an inbuilt mechanism meaning that as competition grows, it becomes a daunting challenge to mine bitcoins.