The Most Mined Cryptocurrency, Bitcoin Is The Most Popular

Crypto miners with their tools. (photo: doc. istock)

JAKARTA - Cryptocurrencies such as Bitcoin and altcoins (other cryptocurrencies besides Bitcoin) need to be "mined" because they are digital forms of currency that operate within a decentralized network, known as a blockchain.

Mining is the process of validating transactions and creating new blocks in the blockchain, which are performed by miners using their computing power.

There are several reasons why Bitcoin and altcoins need to be mined:

1. Network Security: The mining process involves complex computations and requires significant computational power to validate transactions and create new blocks in the blockchain. In doing so, mining helps keep those cryptocurrency networks secure, avoiding threats such as the 51% attack where a single entity can take full control of the network.

2. Transaction Validation: Miners verify transactions that enter the cryptocurrency network and ensure that they are valid and comply with protocol rules. Thus, mining helps prevent fake transactions, fraud, or double spending within cryptocurrency networks.

3. Rewards: Miners are incentivized with prizes in the form of cryptocurrency in exchange for their efforts to validate transactions and create new blocks. This reward is usually the cryptocurrency that is mined itself, such as Bitcoin or other altcoins. This is one of the motivations for miners to involve themselves in the mining process.

4. Distribution of Supply: Mining is also used as a mechanism to distribute the supply of cryptocurrencies within the ecosystem. In some cryptocurrency systems, the initial supply is mined and distributed among the miners as part of the reward, thereby helping to reduce the dependence on a single entity in controlling the supply.

5. Contribution to Innovation: The cryptocurrency mining process involves the use of high computing power and advanced technology. Mining is a source of technological innovation, such as the development of hardware and software needed to increase the efficiency and speed of mining. This can have a positive impact on the overall development of technology.

Some cryptocurrencies that still use a proof-of-work (PoW) mechanism and require mining to validate transactions and create new blocks in their network include:

1. Bitcoin (BTC): Bitcoin was the first cryptocurrency to be introduced and still uses PoW. Bitcoin mining involves using special hardware called "ASIC" (Application-Specific Integrated Circuit) to solve complex PoW algorithms and validate transactions in the Bitcoin network.

2. Litecoin (LTC): Litecoin is a cryptocurrency similar to Bitcoin and uses PoW as a consensus mechanism. However, the PoW algorithm used by Litecoin (Scrypt) is designed to better enable mining using common hardware (CPU and GPU) rather than ASICs.

3. Ethereum Classic (ETC): Ethereum Classic is a fork of Ethereum that maintained PoW as a consensus mechanism after Ethereum switched to PoS. Ethereum Classic mining involves using specialized hardware such as ASIC to validate transactions and create new blocks within their network.

4. Monero (XMR): Monero is a privacy-focused cryptocurrency that uses PoW as a consensus mechanism. Monero mining involves the use of personal computer CPUs and GPUs, and the PoW algorithm used (CryptoNight) is designed to be more resistant to ASIC mining.

However, it is important to remember that the technologies and consensus mechanisms in cryptocurrencies are constantly evolving, and some cryptocurrencies that initially use PoW may switch to a different consensus mechanism such as proof-of-stake (PoS) or other mechanisms in the future.