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What is the difference between storage mining and staking mining (which currencies are involved in storage mining)?

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What is the difference between storage mining and staking mining? Editor\’s note:

What is the difference between storage mining and staking mining (which currencies are involved in storage mining)?

What is the difference between storage mining and staking mining? Editor’s note: This article is from IPFS Force Zone (ID: gh_6cbc62) and is authorized to be reproduced by Odaily Star Daily.

Filecoin is a decentralized storage project. The current blockchain system adopts the POW consensus mechanism, which provides dual protection for miner rewards and network security in the PoW. However, this proof-of-work mining model has two problems:

1. Users cannot upload data to the cloud; 2. Nodes need to be maintained to ensure system stability; 3. When the proportion of global computing power exceeds 50%, they cannot participate in the staking process.

The development of distributed computing technology has made applications running on PoS consensus algorithms more efficient and reliable, while improving transaction speed and cost through hardware devices that provide security and privacy.

Technically, what are the differences between storage mining and staking mining?

1) Storage mining is a way to obtain cryptocurrencies by using hard drives as collateral.

2) Storage mining is a virtual application program on the Bitcoin chain, which uses the SHA256 algorithm and some special functions to represent timestamps. The hash value usually represents the order of generating blocks for each person and the amount of data they own, and these elements can be considered to have characteristics such as uniqueness and immutability. Therefore, in the storage mining process, if the block height of a mining pool is greater than its current state, then this mining pool will become an important information source for verifying whether the address has been lost or recovered.

3) The working principle of storage mining is similar to traditional CPU mining. Its working principle is “tasks” in the Ethereum network, that is, to initiate execution requests or trigger transactions for a specific operation to achieve consistent results. Then, according to specified rules, the computer that performs this work will generate new blocks and broadcast them to all sender servers (called miners). Once the receiving miner receives a new block and completes the corresponding operation, it can start the entire system and continue to mine new coins.

4) The main purpose of storage mining is to reduce the consumption of mining machine resources and prevent attackers from destroying the entire network. It can also solve the problem of network performance degradation, such as in some cases, it may cause the lifespan of mining machines to be shortened or failures to occur. Storage mining can also be used to pay for electricity and other fees.

5) Storage mining also has many disadvantages. The first is to avoid network interruptions caused by network congestion.

6) Due to the large network latency and inconvenient upgrades, most mining farms are still located near old machines. With the addition and operation of more mining farms, storage difficulty will increase, and mining pools will gradually migrate to old players.

Currencies Involved in Storage Mining

The Filecoin mainnet will go live on October 15th and is expected to officially launch by the end of January 2021. Among the mainstream currencies, storage tokens are the most focused on in terms of mining. Specifically, they include: ATOM; XMR; ZEC; DASH; XLM; ETC; LTC; BCH; EOS; TRX; QTUM; BSV; NEO (ONT); SERO (ZEN). These currencies are mainly used for network maintenance, operations, and transaction services.

Filecoin is an application based on blockchain technology and operates in a decentralized manner. The application can support any type of data or computation operation, and is managed and verified through smart contracts. It allows anyone to create a distributed cloud server to store data and process transactions, providing them with incentives. Users can mine without leaving IPFS without having to consider other factors such as energy consumption. In addition, Filecoin has its own reward system and governance mechanism, which allows people to vote to determine the direction of project development and also provides incentives.

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