How Mining Works in Simple Terms

Mining is the process of creating new cryptocurrency coins and confirming transactions on the blockchain network. Let's break down this process step by step.

Mining Process

🔵 Transaction Collection. There are many transactions in the network. Miners collect them into one block.

🔵 Solving the Problem. To add a block to the blockchain, miners must solve a mathematical problem. This task requires significant computational power and time.

🔵 Confirming and Adding the Block. Once the problem is solved, the block is added to the blockchain, and all network participants see this new block.

🔵 Reward. The miner who solved the problem receives a reward in the form of new cryptocurrency and fees for the processed transactions.

Mining performs two important functions:

🔵 Creating New Coins. This is the only way to create new coins in the network.

🔵 Transaction Confirmation. Mining ensures the security and reliability of the network by confirming transactions and protecting the blockchain from fraud.

Mining requires significant investments in equipment and electricity, becomes more difficult and expensive with the increase in the number of miners, and price fluctuations in cryptocurrencies affect its profitability.

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Overview of Cryptocurrency Futures Trading Volumes ©️

The image presents data on the 24-hour and weekly trading volumes for various cryptocurrency platforms and futures.

Binance Futures leads with $39.44 billion in 24-hour volume and $337.80 billion in weekly volume. Poloniex Futures is in second place with $29.75 billion in 24-hour volume and $178.52 billion in weekly volume.

OKX Futures ranks third with $16.58 billion in 24-hour volume and $152.07 billion in weekly volume. Bybit Futures and Binance show $13.10 billion and $10.03 billion in 24-hour volume, respectively.

MEXC Futures also showed a significant weekly trading volume of $22.00 billion.

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Let's understand what Farming is

Farming is one of the ways to earn in the world of cryptocurrencies and decentralized finance (DeFi). Imagine a farm where instead of growing vegetables or fruits, you earn income by providing your cryptocurrency for various financial operations.

How does farming work?

🔵 Depositing cryptocurrency. First, you need to place your cryptocurrency on a special platform. This is similar to a bank deposit.

🔵 Providing liquidity. When you place your cryptocurrency in a pool, it becomes available to other users. These users can borrow your cryptocurrency or use it for trading.

🔵 Earning rewards. In exchange for providing liquidity, you receive rewards. Rewards can come in the form of interest from transactions, bonus tokens, or other types of compensation. Essentially, this is your earnings for helping the platform function.

Farming in DeFi allows you to earn passive income higher than bank deposits and participate in the new blockchain-based financial world.

The main risks include fluctuations in cryptocurrency prices and potential errors in smart contracts that can lead to loss of funds.

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Important News of the Week

🔵 Sentient Labs, supported by the co-founder of Polygon, raised $85 million to develop an open artificial intelligence platform. This step aims to democratize AI and enhance AGI (artificial general intelligence) capabilities​.

🔵 Ripple, the developer of XRP Ledger, announced the launch of a new stablecoin that will compete with Tether and USDC. This step is aimed at expanding the Ripple ecosystem and increasing its market share in stablecoins​.

🔵 Ellipsis Labs, the developer of the decentralized exchange Phoenix based on Solana, raised $20 million in a Series A round led by Paradigm. The funds will be directed towards improving the functionality and security of the platform​.

🔵 The transaction volume on decentralized applications (dApp) on the Polygon platform increased by 83%, leading to increased interest in the MATIC token. Despite this, the price of MATIC faced pressure from sellers​.

🔵 According to CryptoQuant, Bitcoin reserves on cryptocurrency exchanges have reached a multi-year low, indicating a growing interest in storing Bitcoin off exchanges. This could impact the supply of Bitcoin on the market and potentially lead to a price increase​.

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Overview of Cryptocurrency Futures Trading Volumes ©️

The image presents data on the 24-hour and weekly trading volumes for various cryptocurrency platforms and futures.

Binance Futures leads with $52.20 billion in 24-hour volume and $346.85 billion in weekly volume. Poloniex Futures is in second place with $29.75 billion in 24-hour volume and $178.52 billion in weekly volume.

OKX Futures ranks third with $22.00 billion in 24-hour volume and $155.82 billion in weekly volume. Bybit Futures and Binance show $18.84 billion and $12.19 billion in 24-hour volume, respectively.

MEXC Futures also showed a significant weekly trading volume of $21.77 billion.

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Spot or Futures: What to Choose

Spot trading and futures trading each have their own characteristics, advantages, and risks.

Spot Market

🔵 Simplicity: Buying and selling cryptocurrencies occur instantly at the current market price.
🔵 Long-term investments: Suitable for those who want to hold assets for a long time.
🔵 Low risk: Less risky compared to futures as there are no margin positions.

Futures

🔵 Hedging: Allows hedging risks by locking in the purchase or sale price of an asset in the future.
🔵 Speculation: The possibility of profit on both rising and falling prices.
🔵 High risk: Using leverage can lead to significant losses.

Choosing between spot and futures depends on your goals, risk level, and experience. Beginners are recommended to start with spot trading, while experienced traders can use futures for hedging and speculation.

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Overview of Cryptocurrency Futures Trading Volumes ©️

The image presents data on the 24-hour and weekly trading volumes for various cryptocurrency platforms and futures.

Binance Futures leads with $70.65 billion in 24-hour volume and $386.91 billion in weekly volume. OKX Futures is in second place with $31.14 billion in 24-hour volume and $172.96 billion in weekly volume.

Poloniex Futures ranks third with $29.75 billion in 24-hour volume and $178.52 billion in weekly volume. Bybit Futures and Binance show $25.56 billion and $17.20 billion in 24-hour volume, respectively.

MEXC Futures also showed a significant weekly trading volume of $23.36 billion.

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