What benefits does mining bring (What is the use of mining calculations)

What benefits does mining bring? According to the “2019 Global Blockchain Industry Panorama and Trends” analysis of the value and significance of Bitcoin, it can be found that due to the high energy consumption of BTC mining, the income generated is also very limited. However, because BTC has a certain network effect, price volatility, and decentralization characteristics, this process becomes easier. In such a situation, an increase in the coin price will allow miners to gain more profit.

So what is the use of mining and how does it generate profits? Let’s first explain it with a basic principle, by calculating a mining economic model:

When a transaction contains one trillion units of cryptocurrency, a small amount of digital assets ranging from 1,000 yuan to 20,000 yuan “in total” will be generated. At this time, “each unit of cryptocurrency (or other)” can be used as a bookkeeping tool or exchange medium to obtain another form of reward. If someone transfers all these digital assets into their own wallet and exchanges them, they can immediately use the funds to complete the exchange operation without any fees to participate in mining.

What is the use of mining calculations?

According to Coindesk, the mining power and hardware of the Bitcoin network are complementary. In the bull market of 2017, the cryptocurrency mining industry experienced huge market demand: more and more institutions invested in cryptocurrencies, people bought equipment to mine and earn profits, and even some companies provided services to support their business growth. However, these new entrants believed that “the coin price has fallen” is the real profit potential. Without them, they would sell tokens at a loss and switch to stocks, etc.

But for ordinary investors, they may not care about the price, but focus on their wallet addresses and transaction fees, and other basic issues. So they do not know how to participate in mining. In fact, many novice users know what mining is. It is a decentralized storage solution used to calculate, verify digital assets and convert them into another form of value. “Miner”, this term comes from the software, refers to a computer system (or part of the system) that can run multiple nodes to perform complex tasks of network computing programs; another component is used to manage databases and other resources (i.e., files). This sounds strange: “When we say you send all the data to the Internet, your server will be hacked and obtain a large amount of data.” Therefore, “mining” is a high-risk investment behavior. In fact, mining only needs to distribute information to individuals or organizations, instead of transferring ownership to your company. Mining requires ensuring that everyone has their own way of recording on the blockchain. To solve this dilemma, miners must verify the bills.