Blockchain is the technology used to record cryptocurrency transactions. Blocks are little forms of data. For example, if you think about your computer or hard drives, it has little blocks in it, where the data such as your pictures and music get stored.
What the blockchain-related to cryptocurrency does is that it organises it and keeps track of your transactions on the web. When you put more than one block together, a blockchain gets created. So, the more the transactions, the bigger the chain gets.
Blockchains are encrypted files stored in the marketplace or platform, wherever the digital currency one is using is. However, it can only be accessed with a password and several different types of encryptions.
For instance, there’s the public encryption where a single key is required to access it. A private key is where a company specifically gives you a key. There is also a hybrid key where both keys are needed - the public key is for the operator or the company site, and the private key is used on the private site.
According to Carter, hybrid is the most secure form of key, as it offers two keys for authentication. However, if a user loses either of those keys, the data could get lost forever because it can’t be hacked easily as it has a high level of encryption.
Digital mining is quite complex, explained Carter. It involves doing calculations on a supercomputer for which specific hardware, special processors, and motherboard are required to do it proficiently. In addition, the processors need to be able to do those mathematical calculations at the speed of light.
“Because everything constantly changes, you need something that will keep up and possibly form the next block in the chain. Therefore, digital mining is gathering the data and speculating what the following information or next transaction is going to be in the block,” he added.
To make money with cryptocurrency, the investor would have to verify and gather all that data and submit it to the mining platform to see if it’s valid. Time, money, and resources are wasted if it's not valid. So, it does take a lot of time and resources, especially electricity.
However, Carter stressed that it’s worth it if what you are mining is gathering money. There are over thousands of different types of cryptocurrencies out there, and to mine a specific one that could offer a great return might be a gamble.
“I know few people that do this and have multiple computers and setups and an extensive pipeline and are just about breaking even. But the currency is theirs after it’s validated. So instead of buying it, you’re trading money for time and resources,” he highlighted.
Digital mining is gathering data and speculating what the next transaction is going to be.
