Lifecycle of cryptocurrencies – From creation to trade and destruction
Jan 22 2022 03:33 IST
Mining for crypto tokens is only the first step BI India
- Cryptocurrency miners originate the coins that go on to circulate among investors.
- These coins can be kept idle in a wallet, traded on an exchange, or ‘extinguished’ and ‘burned’ in some cases.
- Mining has been blamed for rising PC component prices, even as individual profitability trends down.
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Mining for crypto tokens is no longer something that’s unheard of after the surge in cryptocurrency seen over the past decade, however there’s a lot more to it than just setting up ‘rigs’ and the common complaint of high energy consumption.
The process for mining cryptocurrencies isn’t a one and done deal. It actually goes through an entire lifecycle — from discovery to destruction. These lifecycle phases are primarily applicable to Bitcoin and Ethereum, which together dominate almost 60% of cryptocurrency market’s overall value, but are also applicable to most ‘altcoins’ that have followed in their footsteps.
Here’s a quick peek at how tokens go from being mined, and eventually into the larger crypto ecosystem:
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