Cryptocurrency Mining: A Short Background
Cryptocurrency is probably foreign to some people today because the mainstream still doesn’t give it enough exposure to gain widespread public acceptance. For roughly a decade or more, though, cryptocurrency has been around. Read further if you want to know more about the brief history of cryptocurrency and digital currency mining.
The idea of cryptocurrency possibly dates back to the early 1980s. During this time, David Chaum, an American cryptographer, thought about inventing electronic money that incorporates cryptography. More than a decade later, he implemented his creation via DigiCash, one of the earliest forms of cryptographic e-payments requiring user software for banknote withdrawals. Many years later, other pioneers invented their respective idea of cryptocurrency.
Fast forward to January 2009, a pseudonymous developer went by the name of Satoshi Nakamoto and created Bitcoin, which employed the cryptographic hash function SHA-256 (Secure Hash Algorithm 256) during its proof-of-work stage. Today, Bitcoin is widely recognized as the world’s first cryptocurrency and perhaps the only digital currency that popularized the decentralized finance industry.
Since Bitcoin’s inception, there have been more than 1,600 various cryptocurrencies, with a brand new one launched every week. In addition, the cryptocurrency market spawned its subset of industry-wide trends, with the initial coin offering (ICO) being a concrete example. ICOs have become a popular method for blockchain-based businesses to raise project funds via cryptocurrency.
Apart from ICOs, the cryptocurrency market fostered another trend that would become one of the industry standards: crypto mining. Nearly immediately following the launch of Bitcoin, the first introduction of the concept of cryptocurrency mining transpired.
One must initially observe how cryptocurrency mining connects to the blockchain to understand how it generally works. Each transaction made using a virtual currency is encrypted and stored in a block; after several transactions, any publicly accessible blockchain adds that block.
Crypto mining has come a long way since then, transitioning from a hobby for enthusiasts to a lucrative practice.