Crypto 101 (Understanding Cryptocurrencies & Mining)

 I. Understanding Cryptocurrencies 

Cryptocurrencies are digital or virtual currencies underpinned by cryptographic systems. They enable secure online payments without the use of third-party intermediaries. "Crypto" refers to the various encryption algorithms and cryptographic techniques that safeguard these entries, such as elliptical curve encryption, public-private key pairs, and hashing functions.

Cryptocurrencies can be mined or purchased from cryptocurrency exchanges.
The skyrocketing value of cryptocurrencies has made them popular as trading instruments. To a limited extent, they are also used for cross-border transfers.


Blockchain Technology

Central to the appeal and functionality of Bitcoin and other cryptocurrencies is blockchain technology. As its name indicates, blockchain is essentially a set of connected blocks or an online ledger. Each block contains a set of transactions that have been independently verified by each member of the network. Every new block generated must be verified by each node before being confirmed, making it almost impossible to forge transaction histories. The contents of the online ledger must be agreed upon by the entire network of an individual node, or computer maintaining a copy of the ledger.

Experts say that blockchain technology can serve multiple industries, such as supply chain, and processes such as online voting and crowdfunding. Financial institutions such as JPMorgan Chase & Co. (JPM) are testing the use of blockchain technology to lower transaction costs by streamlining payment processing.

Types of Cryptocurrency

Bitcoin is the most popular and valuable cryptocurrency. An anonymous person called Satoshi Nakamoto invented it and introduced it to the world via a white paper in 2008. There are thousands of cryptocurrencies present in the market today.

Each cryptocurrency claims to have a different function and specification. For example, Ethereum's ether markets itself as gas for the underlying smart contract platform. Ripple's XRP is used by banks to facilitate transfers between different geographies.

Bitcoin, which was made available to the public in 2009, remains the most widely traded and covered cryptocurrency. As of November 2021, there were over 18.8 million bitcoins in circulation with a total market cap of around $1.2 trillion. Only 21 million bitcoins will ever exist.3

In the wake of Bitcoin's success, many other cryptocurrencies, known as "altcoins," have been launched. Some of these are clones or forks of Bitcoin, while others are new currencies that were built from scratch. They include Solana, Litecoin, Ethereum, Cardano, and EOS. By November 2021, the aggregate value of all the cryptocurrencies in existence had reached over $2.1 trillion—Bitcoin represented approximately 41% of that total value.

Are Cryptocurrencies Legal?

Fiat currencies derive their authority as mediums of transaction from the government or monetary authorities. For example, each dollar bill is backstopped by the Federal Reserve.

But cryptocurrencies are not backed by any public or private entities. Therefore, it has been difficult to make a case for their legal status in different financial jurisdictions throughout the world. It doesn't help matters that cryptocurrencies have largely functioned outside most existing financial infrastructure. The legal status of cryptocurrencies has implications for their use in daily transactions and trading. In June 2019, the Financial Action Task Force (FATF) recommended that wire transfers of cryptocurrencies should be subject to the requirements of its Travel Rule, which requires AML compliance.

As of December 2021, El Salvador was the only country in the world to allow Bitcoin as legal tender for monetary transactions. In the rest of the world, cryptocurrency regulation varies by jurisdiction.

Japan's Payment Services Act defines Bitcoin as legal property.6 Cryptocurrency exchanges operating in the country are subject to collect information about the customer and details relating to the wire transfer. China has banned cryptocurrency exchanges and mining within its borders. India was reported to be formulating a framework for cryptocurrencies in December.7

Cryptocurrencies are legal in the European Union. Derivatives and other products that use cryptocurrencies will need to qualify as "financial instruments." In June 2021, the European Commission released the Markets in Crypto-Assets (MiCA) regulation that sets safeguards for regulation and establishes rules for companies or vendors providing financial services using cryptocurrencies.8 Within the United States, the biggest and most sophisticated financial market in the world, crypto derivatives such as Bitcoin futures are available on the Chicago Mercantile Exchange. The Securities and Exchange Commission (SEC) has said that Bitcoin and Ethereum are not securities.

Advantages

• The advantages of cryptocurrencies include cheaper and faster money transfers and decentralized systems that do not collapse at a single point of failure.

• Cryptocurrencies promise to make it easier to transfer funds directly between two parties, without the need for a trusted third party like a bank or a credit card company. Such decentralized transfers are secured by the use of public keys and private keys and different forms of incentive systems, such as proof of work or proof of stake.11

• Because they do not use third-party intermediaries, cryptocurrency transfers between two transacting parties are faster as compared to standard money transfers. Flash loans in decentralized finance are a good example of such decentralized transfers. These loans, which are processed without backing collateral, can be executed within seconds and are used in trading.12

• Cryptocurrency investments can generate profits. Cryptocurrency markets have skyrocketed in value over the past decade, at one point reaching almost $2 trillion. As of Dec. 20, 2021, Bitcoin was valued at more than $862 billion in crypto markets.13

• The remittance economy is testing one of cryptocurrency's most prominent use cases. Currently, cryptocurrencies such as Bitcoin serve as intermediate currencies to streamline money transfers across borders. Thus, a fiat currency is converted to Bitcoin (or another cryptocurrency), transferred across borders and, subsequently, converted to the destination fiat currency. This method streamlines the money transfer process and makes it cheaper.



• The only disadvantages of cryptocurrencies include price volatility, and high energy consumption for mining activities, however recent technological advancement has made it possible for individuals to mine cryptos even on their mobile phones. 

II. Cryptocurrency Mining

What Is Mining In Cryptocurrency?

Mining is the process that Bitcoin and several other cryptocurrencies use to generate new coins and verify new transactions. It involves vast, decentralized networks of computers around the world that verify and secure blockchains – the virtual ledgers that document cryptocurrency transactions. In return for contributing their processing power, computers on the network are rewarded with new coins. It’s a virtuous circle: the miners maintain and secure the blockchain, the blockchain awards the coins, the coins provide an incentive for the miners to maintain the blockchain.

How does mining work?

There are three primary ways of obtaining bitcoin and other cryptocurrencies. You can buy them on an exchange like Coinbase, receive them as payment for goods or services, or virtually “mine” them. It’s the third category that we’re explaining here, using Bitcoin as our example. 
You might have considered trying bitcoin mining yourself. A decade ago, anyone with a decent home computer could participate. But as the blockchain has grown, the computational power required to maintain it has increased. (By a lot: In October 2019, it required 12 trillion times more computing power to mine one bitcoin than it did when the first first blocks were mined in January 2009.) As a result, amateur bitcoin mining is unlikely to be profitable for hobbyists these days. Virtually all mining is now done by specialized companies or groups of people who band their resources together. But it’s still good to know how it works.

Specialized computers perform the calculations required to verify and record every new bitcoin transaction and ensure that the blockchain is secure. Verifying the blockchain requires a vast amount of computing power, which is voluntarily contributed by miners. 

Bitcoin mining is a lot like running a big data center. Companies purchase the mining hardware and pay for the electricity required to keep it running (and cool). For this to be profitable, the value of the earned coins has to be higher than the cost to mine those coins. This is all about traditional crypto mining but there is mobile mining whereby people can download apps on their mobile phones and mining cryptocurrency tokens simply by tapping the apps daily.


Now that you can mine on your smartphone. Your smartphone can become a massive tool to help boost your crypto portfolio. 

Let's consider what you need to get started for those of us who have never mined before.

First thing you need is to have enough space in your mobile to be able to download mining apps.

Personally, i have more than 16 different mining apps on my phone. 

If you don't have enough space on your mobile, delete irrelevant apps and files that don't put money in your pocket.

There are also sites where you can mine without downloading any app. I'll introduce one of such sites after introducing the first mining app which is very size friendly; and it's coin is going to have a lot of value in the market once listed considering the fact that they have very good projects backing their cryptocurrency token and they have a very limited supply. 

👇🏼

*Alpha Network....This is one of the best mining apps i mine with; every 30 minutes you are notified to open a loot box & collect more mining speed or free coins.

Download the app to start free mining of this amazing coin project with limited supply. The app size is not more than 10mb.
Click on link below now!
www.minealpha.net
Use the I.V Code: Chrisen10


*The next is a free mining site called Storm Gain. You don't need to download their app to start mining. Stormgain is a free bitcoin mining site but requires a lot of hard work, mining every 4 hours.
Register to start mining by clicking on link below:

https://app.stormgain.com/friend/BNS91362383


*The last i'll introduce here which is about being listed on Binance cryptocurrency exchange platform, is Pi network. If you're not mining this coin, you had better start mining it from tonight. They have great projects too. You have to Register & download the app to start mining. Click on the link below to get started:
https://minepi.com/Chrisen21 and use my username (Chrisen21) as your invitation code.