Home >
What is the principle of cryptocurrency? The Cloud Mining Cryptocurrency 2021

What is the principle of cryptocurrency? The Cloud Mining Cryptocurrency 2021

​Many coin lovers speak of Bitcoin, Litecoin, and Dogecoin with all their backgrounds, but they don't know the principle of cryptocurrency. This will undoubtedly restrict the self-improvement of many people. How can we practice ourselves, learn more about the blockchain, and gain a deeper understanding of the blockchain industry? Let’s talk about the cloud mining cryptocurrency 2021 today.

Cloud mining cryptocurrency2021: Blockchain White Paper

The white paper is another name for the official document in the world, and the community consensus of freedom and autonomy is promoted by various blockchain projects, so the white paper is also used as the name of its official document. The most famous of these is of course the Bitcoin white paper published ten years ago: "Bitcoin: A Peer-to-Peer Electronic Cash System" published by Satoshi Nakamoto's individual or organization. After a lapse of ten years, the Bitcoin white paper is still a classic, because it still explains in detail the operating principles of Bitcoin and the blockchain technology it relies on.

Cloud mining cryptocurrency 2021: The birth of Bitcoin opened the door to the blockchain world, and laid the foundation for the subsequent development of the consensus community and the circulation and prosperity of tokens. Reading the Bitcoin white paper will give you a deeper understanding of the decentralization, anonymization, and irreversibility of the blockchain. Reading the white papers of other projects will enable you to understand the feasibility, economic model, team, and technical strength of the project from the bottom, and establish a baseline understanding of it, whether it is used as the basis for project evaluation or the project party in the future. Supervision is necessary.

Cloud mining cryptocurrency 2021: Understanding Public Chains and DApps

Public chain is the name of the blockchain open to the whole network. In addition to supporting Bitcoin as a payment tool, the significance of the public chain can also complete functions such as creating smart contracts and developing decentralized program DApps through script instructions on the blockchain. This is the second-generation public chain: Ethereum. And a more complex third-generation public chain: EOS, which is positioned for large-scale commercial use.

The development of the blockchain is subject to the scalability of its public chain, which is also the main factor that induces the iteration of the public chain. For example, Bitcoin Cash BCH is the public chain after the expansion of the Bitcoin main chain, and the future BCH hard fork will also It will be the process of transforming BCH into a second-generation public chain. Cloud mining cryptocurrency 2021: The scalability of the public chain is affected by the storage size, bandwidth width, and computing power of the blockchain. In addition, the consensus mechanism is also a major factor affecting the public chain, such as equal bits. Coin PoW consensus mechanism, and represents an efficient PoS consensus mechanism.

DApp is a decentralized application. It is an application stored and running on a distributed network. It can also be said to be a set of smart contracts running on the blockchain. Distributed and decentralized are its biggest characteristics. In addition, DApp also inherits the open-source and consensus mechanism of the public chain it carries.

Cloud mining cryptocurrency 2021: Understanding the design elements, architecture, and consensus mechanism of a public chain, as well as the performance they represent, can give you a fundamental understanding of its processing capabilities and expansion capabilities and its DApp performance. Evaluate.

Cloud mining cryptocurrency 2021: Investment Practice

The incentive mechanism is the reason why the blockchain can continue to operate. The generation of blocks and the maintenance of the chain require users to complete local calculations, and users who successfully produce blocks will receive rewards from the main network. This is miners’ cloud mining. Miners benefit by continuously obtaining rewards for output blocks, and these rewards are also called Coins, such as BTC, ETH, etc. Assuming that an individual obtains BTC and ETH by obtaining block rewards, and then wants to change to currencies that can be used in daily life, that is, legal tender, they need to use trading tools, of which the most commonly used is the cryptocurrency exchange.

In addition to the decentralized exchange that is still under development, some currency financial service platforms may be used in normal times.

Cryptocurrency exchanges play an important part in the entire blockchain incentive mechanism. Through global value exchange, the incentive gains become more valuable, thereby promoting more users to enter cloud mining cryptocurrency 2021 and voluntarily maintaining the blockchain network. Although fluctuations in the market price of exchange currencies will also have a greater impact on the blockchain network, especially changes in the number of active users, as part of the blockchain ecology, exchanges and financial service platforms are indispensable.