Crypto mining: Top 10 terms to master!

Do you want to get started in crypto mining? The first thing to do is to get information via guides or tutorials. However, there is a problem: you can easily get lost with the different vocabularies. To help you, here are some important glossaries related to crypto mining.

1. Mining

“Mining” refers to the process of validate transactions on a blockchain (like Bitcoin).

Crypto mining involves the use of RIGs with significant computing power. Goals :

• solve complex calculations,
• validate transactions,
• create new blocks.

Crypto mining also allows create new cryptocurrency unitsof which the miners receive a certain amount in exchange.

2. Crypto Mining RIG

A crypto mining RIG is a computer made up of several graphics cards. Miners use it to secure the blockchain. To do this, they perform complex mathematical calculations in exchange for rewards in the form of cryptocurrencies.

Any fan of crypto mining knows this very well: mining RIGs require a significant initial investment and quality equipment. The goal: to maximize their computing power.

3. Blockchain

Blockchain (or “block chain” in French) refers to a decentralized database which records all information relating to transactions since their creation. This includes :

• timestamp,
• the amount,
• the transmitter.

This database is shared simultaneously with all users. Also, each node has a copy of the blockchain.

Since it is decentralized, a blockchain becomes freely accessible by all. It is not controlled by a central entity, making censorship impossible.

That’s not all ! Data validated on a blockchain is immutable thanks to consensus algorithms. This could be Proof of Work (PoW) or Proof of Stake (PoS).

4. Proof of Work (PoW)

Proof of Work (PoW) is an algorithm used to achieve distributed consensus on a blockchain and guarantee its security.

Concretely, miners must solve complex mathematical problems using mining RIG. The goal is to validate transactions and create new blocks. In exchange for this work, they receive rewards in the form of cryptocurrency. THE Bitcoin Proof of Work uses the SHA-256 algorithm to design these problems.

5. Proof of Stake (PoS)

Proof of Stake (PoS) is an alternative algorithm to Proof of Work. In the world of crypto mining, it is used to achieve distributed consensus on a blockchain and guarantee its security.

To participate in this process, users must accumulate a sufficient quantity of tokens of the native cryptocurrency exchanged on this blockchain. Indeed, the rule is simple: the more tokens they own, the more likely they are to be selected to secure the blockchain and receive rewards in exchange.

6. Mining reward

The crypto mining reward corresponds to the rewards that miners receive in exchange for their work on the blockchain. These rewards are generally paid in the form of cryptocurrency.

7. ASIC (Application Specific Integrated Circuit)

ASIC or Application Specific Integrated Circuit is a type of electronic circuit designed to perform calculations specific to crypto mining. Its processing power is much greater than that of a graphics card. Which makes it the preferred choice for bitcoin miners orEthereum to power crypto mining operations (in addition to RIG).

8. Hash

We use the term “Hash” (or “Hash” in English) to designate a signature or fingerprint in IT and cryptocurrencies. It is mainly used to ensure security during information transfers between people or computer systems. On the Bitcoin network for example, this security is ensured by SHA-256.

9. Halving

Halving or “halving” in French describes a periodic event that can occur on a blockchain. We often refer to Bitcoin halving.

During this process, we divide by two crypto mining rewards. For Bitcoin for example, this reduction occurs every four years or every 210,000 blocks mined. In reality, halving makes the crypto asset rarer over time by gradually reducing the issuance of new units of cryptocurrency.

10. Crypto Mining Pool

A mining pool refers to a group of miners who pool their resources together to increase their chances of receiving larger rewards. This association allows individual minors to build a crypto mining farm with higher computing power. But not only ! This mainly improves their chances of mining a block.

Then, we share the rewards in proportion to the computing power provided by each individual miner. This alternative is particularly beneficial for those with low hashing power.