Cryptocurrency Mining and Mining Difficulty: How the Process Works

Test Your Knowledge

1. What is the primary purpose of cryptocurrency mining?

A) To create new cryptocurrencies

B) To secure the blockchain network and validate transactions

C) To increase the supply of cryptocurrency

D) To reduce mining difficulty

2. Which type of mining involves using specialized devices designed solely for cryptocurrency mining?

A) CPU Mining

B) GPU Mining

C) ASIC Mining

D) Cloud Mining

3. How does mining difficulty impact miners' profitability?

A) It decreases profitability by reducing transaction fees

B) It makes it easier to mine and increases profits

C) It increases operational costs and requires more efficient hardware to remain profitable

D) It doesn't impact profitability