Cryptocurrency

What are the cryptocurrencies more profitable for mining?, Part II

The mining cryptocurrencies is the fundamental activity on which stands the building of the crypto world. It is impossible to consider even the existence of the technology Blockchain, without the existence of mining. However, this is not a process homogeneous to all criptoactivos. On the contrary, the mining can be done in two ways, through the Proof of Work (Proof of work) or Proof of Stake (Proof of participation).

The option of Nakamoto: Proof of Work

The first of these two mining methods is the so-called Proof-of-Work or PoW. This was included by Satoshi Nakamoto as a method to reward the work of the members of the community of Bitcoin. And to ensure that they continue contributing their computing power to maintain the chain of blocks, and with it all the criptomoneda. Method Proof of Work to the mining works in quite simple way. Basically the idea of this protocol requires that the user who intends to be a node for the inclusion of the operations of the Blockchain within the blocks of the same, perform some type of work. Normally, complex mathematical operations, who serve their time to protect with cryptographic technology the data of the operation. A classic example of calls evidence of work is the captcha. An item that requires us to the realization of an effort before being able to execute a certain operation. What prevents a bad use of the platform that includes the captcha as a means to protect themselves. In addition, the Proof of Work, provides the perfect medium to encourage users of Bitcoin to provide their computing power to the network. Therefore, the reward that you would be getting for the effort they put in fixing the operations in the chain of blocks, would not come out of nothing, but from a work paid to the criptomoneda.

A means to gain greater control: Proof of Stake

However, the method of Proof of Work was not satisfactory to all the world. And that is, if the nodes of the network are the ones who make decisions about the Blockchain, and anyone who is able to provide computing power that is potentially a node of the chain. Then organizations that wish to maintain a greater control over the future of its virtual currency, you only have two options: change the protocol or to create a Blockchain private. One of the cryptocurrencies more important that uses PoS is DASH A group nourished of cryptocurrencies decided to take the first option. Being born of this so-called Proof of Stake or proof of participation. A protocol for the validation of transactions in the Blockchain, which reduces the amount of nodes with the ability to influence the same. And that is, the nodes that may undermine a criptomoneda are chosen randomly. However, they will have a greater chance to be chosen as nodes, those that meet certain requirements. The most common are the amount of the criptomoneda in booking or the time it takes chipping away, but any criteria is valid for establishing who will be a node, which gives a great power to the organization to design the chain. Of course, there is another reason beyond keeping the control over the Blockchain to use Proof of Stake. Therefore, unlike the Proof of Work where all the work is done jointly, and therefore the execution of the operations takes a long time. With the PoS protocol, a few nodes can execute all operations, making them much faster. This is a determining factor when deciding if we should be involved in the mining of any criptomoneda. Therefore, depending on whether the protocol is used Proof of Work or Proof of Stake, will be more or less difficult for us to participate in the mining process, and therefore generate profits. The following two tabs change content below. Student of International Studies, interested in issues of economy and international politics. Passionate about the progress of the Fourth Industrial Revolution in general and the cryptocurrencies in particular.

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