When a transaction is issued, it is transmitted and validated by computers that make up its network. These computers are those of individuals and companies who have decided to dedicate the power of their machines to the operations of the currency in question. In return they are rewarded with cryptocurrency on which they allocate their machine powers for calculation. The amount earned is relative to the power allocated: the more power you allocate, the more money you will receive.
It is the validation of several computers that will approve each transaction. Basically, this makes it possible to verify that the person who issues the transaction has the necessary funds to pay the recipient. Once the validation is complete, each computer that participated in the validation of it, is allocated a certain amount of cryptocurrency, in proportion to its participation.
Participation in transaction calculations is more commonly called mining.
Mining is also linked to a difficulty. Simply put, let’s take the example of a new little-known currency whose cost and community is relatively small.
Its works on its own BlockChain is in need of computing power to function properly. If no one allocates power to this BlockChain, then the transactions cannot be verified and therefore not performed. Just as if there is too much demand for transactions when the power allocated to the BlockChain is too low, the transaction calculation time will be high. The mining difficulty in this case will be low, because the BlockChain needs you to function. If you allocate your computing power to this currency, the reward in cryptocurrency on this currency will be great.
However, if this currency starts to develop, that is to say that a lot of people are interested, buy and mine, then the difficulty will increase and it will become more difficult to undermine it because there will be many others computing powers other than yours allocated to this BlockChain. The currency will need you less to function, unless your hardware is very powerful in computing power, the rewards will also be weakened.
To take a concrete example today and to make you understand simply, we will take the example of the famous Bitcoin.
The Bitcoin was created in 2009, at that time, mining could bring several Bitcoin a day with a conventional computer as you have at home. At that time a bitcoin was worth a few dollars.
The years are past and the currency has overdeveloped, Bitcoin is considered today as the most successful cryptocurrency, and has users by the millions.
If you allocate today the computing power of your computer to the Bitcoin’s operations, you will only earn a ridiculous sum of Bitcoin, maybe 0.0000001, instead of the 1 you could have won a few years ago.
1 Bitcoin today is worth about $6600, no need to draw a picture, you will understand that if you had mined at the time of its release a large amount of Bitcoins and that you had waited today to sell them, you will probably be a millionaire.
The difficulty of mining is therefore the relationship of the price of money, the number of users and the computing power allocated.
If you want to become a millionaire by mining with your computer, all you have to do is find the “future Bitcoin” and mine a huge quantity as long as its difficulty level is still low.