Simply stated, crypto mining means solving complex mathematical formulas to create crypto funds, by means of hardware or software.
With mining, everything is documented on the blockchain. Everything is collected in a ‘block’, which then forms a chain of blocks in line with each other. You must remember that additions can only be made behind the block. Past transactions will always remain a part of the Blockchain and cannot be changed.
Incidentally, not only are the transactions stored, but also refer to the previous block (the hash): a difficult to crack the mathematical puzzle.
The control over the transactions is usually achieved with what is called a Proof-of-Work protocol (PoW), a hashing algorithm. Or the complicated puzzle that must be solved by the miners. Thanks to PoW, there is agreement about all transactions in the records (Ledger). The computing power that the computer has provided for solving the mathematical puzzle and updating and checking the records is a proof of work. PoW. Thanks to this protocol, you do not need, for example, an accountant or auditor.
With mining, you thus contribute to the security of cryptocurrency. That is, however, not the only advantage of crypto mining. As mentioned earlier in this article, you can also receive a reward for the use of the computing power of your miner. The biggest gains, however, can lie in discovering a new block in the Blockchain. Bitcoin has become very competitive, and therefore a lot of computing power is needed to earn a little bit. This therefore costs your miner a great deal of power. With other, smaller or newer crypto coins (ALTcoins), it can be easier. The value of this currency may still increase, which means that in the long run, you can still achieve a nice return.