Cryptocurrency has been in the news a lot lately. Even with all of its publicity, many people looking to learn more about crypto companies such as Gryphon Digital Mining don’t understand what they’re getting into. While a technical process, crypto mining and trading isn’t a complicated concept. Here is a quick rundown of cryptocurrency and what it can do for you!
There has been a lot of interest in investing and obtaining cryptocurrency in the past few years. Getting a handle on the basics is essential before taking a deep dive into the world of crypto. Designed to be a stand-alone monetary system, cryptocurrency is a digital currency that can be used for the purchase and sale of goods worldwide.
Either using your own tech or going through a service such as Gryphon Digital Mining, investors can literally generate currency using the blockchain as with Bitcoin or other collection methods. The benefit of this kind of currency over traditional fiat varieties is that it is backed by its own reliability instead of government influence. For people looking to get their hands on funds impervious to a centralized authority, crypto is a great alternative!
Basics of Blockchains
One of the most confusing aspects of crypto that flies over the heads of most people is the blockchain. The heart of major players such as Bitcoin, this distributed database is how crypto can maintain its independence. There are several essential aspects to understanding blockchain technology, including:
- Data is stored in blocks and linked through cryptographic formulas.
- Collected data is stored in a block which, once full, is chained to the previous entries.
- While a multitude of data can be stored, cryptocurrencies rely on it as a leger for transactions
- For Bitcoin, the database is decentralized so the collective user base has control
- A decentralized blockchain has fixed data, making it a permanent record of Bitcoin transactions that are publicly viewable.
Because the blockchain cannot be changed, this makes transfers of goods and services easily trackable. Each purchase makes an indelible mark that preserves the integrity of the data.
Kinds of Cryptocurrency
There are several different kinds of crypto vying for dominance over the market. Each has its own unique way to handle the problems and powers of digital currency, though only a few have gained a foothold worldwide, such as:
- Bitcoin (BTC): The oldest form of crypto, it uses blockchains to permanently record transaction data.
- Ethereum (ETH): Using programmable blockchains, this currency started as a way to pay for decentralized applications.
- Tether (USDT): The first stablecoin backed by a fiat currency, in this case, the US dollar.
As with Tether, stablecoins are becoming more popular since they have real-world counterparts that may prevent their systems from a perceived implosion. The tradeoff leaves these options vulnerable and subject to the success of the dollar.
The term “mining” for crypto stems from the term used for acquiring minerals and precious metals in the real world. Instead of digging through rocks and dirt, crypto miners need to solve complex equations using powerful computers and a lot of processing power. The correct answer is found via calculations and guesswork, providing a proof-of-work called a hash. The more miners on the network, the more difficult it becomes to be the first to find the hash.
In addition to generating the hash, computers also log transactions and add headers to the data. Once a block is successfully created, the miner is rewarded with a certain amount of currency. Companies like Gryphon Digital Mining use application-specific integrated circuits (ASICs) in powerful PC to accomplish this. Crypto mining is most commonly associated with Bitcoin, though other currencies use similar methods to produce bitcoin.
The largest complaint against crypto mining comes from the powerful computers needed to run ASCI devices. This creates a negative environmental impact on a variety of levels. In a recent White House press release, the emissions produced from powering these machines are comparable to those released by diesel-fueled trains in the United States. The study also notes that other areas of the environment can be affected, including air, water, and noise pollution.
Thankfully, companies such as Gryphon Digital Mining have turned to carbon-neutral options to try and negate some of crypto’s more environmentally unfriendly characteristics. By using carbon offsets, these businesses can mine for Bitcoin and other currencies in ways that are better for the planet.
When it comes to investing in cryptocurrency, it pays to know what you’re getting into. Research the different kinds of digital currency out there before deciding on how you want to invest. If you’re not interested in creating your own mining rig yourself, convenient companies like Gryphon Digital Mining can make the job that much easier. Getting in on the ground floor of a cryptocurrency investment can be the blockchain that links your stock portfolio to success!