What is Cryptocurrency Mining?

While talking about the Blockchain, it is mentioned that each block needs to be validated in order to be added to the Blockchain. Validation methods differ from platform to platform. Common validation methods are Proof-of-Work (PoW), Proof-of-Stake (PoS), and Consensus. Bitcoin uses Proof-of-Work to validate and add blocks to its Blockchain. In our game Blockchain Tycoon, we are assuming the coins you earned in the game are rewards of PoW and validation of other transactions.

In real life, earning coins is not as easy as it sounds. For example, in Bitcoin network, in order to earn Bitcoin rewards, you need to verify the transaction and you need to be the first miner to calculate the same hash value in the block. A hash value is calculated by solving a complex mathematical problem. This is the part that GPU and ASIC come in.

Why are we using GPU and ASIC?

In order to calculate the result of the problem that will give us the same value as in block, we need some processing power like a CPU or GPU. But, in order to be the first miner to calculate the value, we need much more processing power than the other miners. A CPU is slower compared to GPUs. At the early days of the Bitcoin, CPUs can be used to calculate the hash value, but as the number of miners increase, total processing power in the network also increased. So, the coins can only be mined with GPU and ASICs. An ASIC means Application-Specific Integrated Circuit which is designed to solve a specific problem. Different from CPU and GPUs, they are not efficient to use for general purpose problems. Instead, they can be designed to solve the exact problem that needs to be solved for earning coins. Processing power of the ASICs are much more greater than the CPU and GPUs.

Leave a Reply

Your email address will not be published. Required fields are marked *