How does cryptocurrency mining work, is it profitable?

Mining consists of validating and recording transactions in the blockchain. For this, all the nodes of the network participate in the successful resolution of the puzzle that involves the search for the block, where taking into account a random number and applying a cryptographic function, a hash that meets one characteristic is found: certain amount of leading zeros. This work requires effort and computing power, which ensures that it is complex to write new transaction blocks in the registry and thus prevent an attacker from generating a false block and adding it to the network or modifying an existing block. Not all cryptocurrencies work in the same way, since the way of mining depends on the system that uses the blockchain or the algorithm of each cryptocurrency. However, they all have something in common: miners do not perform useless operations, but these are necessary to maintain the stability and security of the network. Since their work is so important, miners charge an amount of money for their mining work. In the case of bitcoin, for example, every time a miner finds a valid block, he is rewarded with 12.5 bitcoins. Payment is made with coins that are in reserve and at that time they come into circulation, which is why it is mistakenly believed that cryptocurrency mining involves generating new currencies. The currencies are already previously defined, however, through mining, new currencies are brought into circulation.

Is cryptocurrency mining profitable?

You probably heard about the big bitcoin mining farms, which consist of huge data centers near power plants or sheltered in the cold of Iceland. This makes many people think that bitcoin mining is already a big business thing and it is impossible to participate. In part this is true; but not because it is impossible, but because the competition is so great that it is very unprofitable to invest in the equipment necessary to mine bitcoins. While Bitcoin is the first and most popular cryptocurrency, there are currently more than 100 alternatives, also known as altcoins. Each of these currencies have their own algorithms and mining costs. In many of them it is possible to participate only with a good graphics card (these work very well to solve mathematical calculations) or even with a traditional computer. For example, Ethereum is considered the second most used cryptocurrency after Bitcoin, and it is possible to undermine it from a graphics card and specific software. On the other hand we also have Monero, which became very popular because it was simply mined through a script that runs in a browser; particularity that took advantage of many cybercriminals with new techniques such as cryptojacking. Finally, a profitable alternative is mining pools. These are groups of users that meet with the objective of uniting the computing power of all participants and thus have greater possibilities of finding valid blocks and winning the reward, which they then divide among all. There are different types of mining pools, some more stable and others more profitable, depending on the volume of work handled by each pool.