Core Scientific and Cryptocurrency Basics

in LeoFinance6 months ago

On December 17, 2020, the U.S. Bitcoin mining firm Core Scientific announced that it plans to expand its fleet of ASIC miners to over 77,000 in number.

Image by Gerd Altmann from Pixabay

Introduction

Image by Prawny from Pixabay

Welcome to fellow Hivians. My journey into finances continues with my attempts at understanding crypto mining. Today, we'll be discussing a new tech announcement in the area of cryptocurrency. We'll also touch on some basics that have eluded me and, perhaps, others new to cryptocurrencies.

Cryptomining Overview

Raw Material Mining (Image)


Image by S. Hermann & F. Richter from Pixabay

Cryptocurrency Mining (Image)

Sci Tech - Ben Cousins

Humanity today utilizes colossal machinery to pull precious resources from the Earth for its uses in trades and production. Armies of humans and machines work towards meeting the world's needs. Cryptocurrencies also utilize similar armies. The exception is that the colossal machinery that breaks apart the earth for extract is replaced by legions of computers working to solve math problems.

I would imagine that we can continue to compare the similarities from both forms of mining. They both consume power to fulfill their goal and, depending on the operation's scale, may have a considerable impact upon the environment.

CryptoCurrency Blocks

Image by Pete Linforth from Pixabay

A block is a grouping of transactions that are verified by computers solving complex mathematical problems. Computers that solve these math problems are said to be "mining" the applicable cryptocurrency. Miners are typically awarded cryptocurrency plus transaction fees after they complete a block.

The size of the blocks may vary depending upon the cryptocurrency. However, the size can ultimately be changed if the network requires it.

All blocks are limited in size. Regarding Bitcoin, the current size of any block is 1 megabyte. Ethereum, on the other hand, currently has a block size of about 8 megabytes.

Each block contains instructions for the miner, references to the previous block, a record of transactions that need to be verified.

Cryptographic algorithms separate blocks in a chain called hashes on the header of each block.

The Hash

Rilcoin - Cryptocurrency Has

Cryptographic algorithms separate blocks in a chain called hashes on the header of each block. The hash is located header of the block and describes the parent of that block.

Remember that, in the previous section, crypto miners verify transactions by solving complex mathematical problems. These problems are the hashes. If you can solve the algorithm, then you can produce the next block of cryptocurrency.

Hash Per Second


Image by PublicDomainPictures from Pixabay

As of April 2020, the Bitcoin Network processed hashes at a rate of up to 120 Exohashes per second) (1 followed by 18 zeroes). The amount of power consumed by such a network amounted to approximately 120 Gigawatts of power. If the data presented in the links is accurate, that is equivalent to the power of almost 20 commercial size nuclear power plants dedicating their output towards the bitcoin network.

Why is such a power output necessary? The cryptocurrency network limits are such that the mathematical problems become increasingly complex as additional users work to mine the cryptocurrency. The more people involved in mining, the harder it is to mine. There's a bit of realism to that logic.

During the beginning of the Gold Rush era in California, you couldn't walk that far before you found a nugget of gold. Nowadays, you need to strip-mine mountains before breaking even.

Core Scientific

Core scientific reports that they've ordered 59,000 additional cryptominers for their continued mining and computation services. Their expansion is set to heighten their output upwards of 7 exahash per second with a high power consumption of 250 megawatts.

They plan on utilizing renewable energies to supply the increased electrical demand but have not discussed their plans in detail. Given that these facilities will run 24 hours a day, at this time, we can gather that renewable energy will supplement their needs when conditions are available.

In Closing

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Image by Gerd Altmann from Pixabay

We've briefly discussed the basics of Bitcoin and cryptocurrencies. We've also touched on one of the big players in cryptomining operations, at least in the U.S. Cryptocurrency is a world far larger than I knew. It's not difficult to guess that it will grow into a juggernaut to rival today's financial institutions.

What part will you play in this new financial world?

Thanks again, fellow readers, for following me along on this HIVE journey. I look forward to learning, blogging, and writing to every one of you.

Posted Using LeoFinance Beta

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