“Mom, where does Bitcoin come from?” Well, you see, when a bright young Bitcoin catches the eyes of an ambitious miner, and they love each other so much …
Wait, of course, it’s hard to fix here. Also, my whole goal is to keep things simple. However, Bitcoin is made up of complex mathematical problems. This is done by a powerful machine built to solve these math problems. This process is called mining. People who own these machines to make money in bitcoins mining are called miners. It is known as a block when solving a series of problems. Blocks are checked by other users, and once checked, they are added to the so-called block string. This chain continues to grow with the addition of a new block every 10 minutes or so. This chain is just a major book that will continue to grow and never end.
Very powerful mining machines crush a lot of power and raise the miner’s monthly bill. The reason he takes so much power is the genius of the math involved. Mining machines require complex cryptographic algorithms. After solving a math problem with the machine, a coin block is created. Each time 210,000 blocks are created, the miner’s reward is halved. It takes 4 years to achieve this. So Bitcoin is kind of like the Olympics. Currently the block prize is 12 Bitcoin (as of June 23, 2020, the prize will be only 6 coins). These coins go to the miner who won the lucky lottery at the time. There is a winner every 10 minutes. There are also many miners competing. The saying goes that the miner is worth something. My enough coins and your electricity bill and then you pay.
There is another way for me. It’s called cloud mining. With this type of mining you are paying to use someone else’s network which in turn significantly reduces your profits. The positive side of this method is that you don’t have to use your electricity or buy a machine.
I think it’s okay. Now I want to start mining. Is it a good idea and can I generate passive income on a regular basis? Maybe. Hold on tight for now and you can make that call later.
Let’s try to break this.
Returning to the original mining machine, you should start buying a quality mining machine. That would cost him about $ 2,000. Here’s a picture of a good machine (Bitmain’s Antminer S9) capable of generating a high hash rate of 14 TH / s. 1 TH / s is 1,000,000,000,000 hash per second. This machine does this 14 times. That’s a great hash power. A hash is just a long number that the machine creates every time it tries to solve the algorithm. Again, to use my lottery analogy, all of these machines are out there hoping to be the next winner.
Then the chances of winning become more and more difficult with more competition. As this issue becomes more complicated, each time a math problem is solved, the next problem becomes more and more difficult to solve. The difficulty of the Bitcoin network changes approximately every two weeks or in 2016 blocks. The number of Bitcoins that will ever be generated is limited. That number is 21,000,000. Once we get that number, it will never be possible to get Bitcoin out again. However, the blockchain itself will continue to expand because it is used to verify each transaction or purchase.
Do you remember the nickname Satoshi Nakamoto I wrote too? Did you know that today’s math problems are 70,000 times more difficult to solve than machines in 2009? The last coin is expected to be released in 2140, as the system is halved every four years (210,000 blocks). 16,400,000 coins have already been issued (78%) and from now on each coin will be issued at a much slower rate. Yes, you read that right. Basically, 80% came out in the first 8 years and it will take more than 100 years to leave the last 20%. If my grandson, great-grandson or great-great-grandson is reading this, I hope to be pretty seated with our family’s Bitcoin now worth 220,000 Bitcoin each. We can all dream well!
Buying a mining machine or buying a mining cloud contract is risky. Although there are some very successful stories, make sure you do some research before deciding if mining is right for you. For every person who makes money, there are many people who make money.
By the way, a great place to see all the cryptocurrencies out there and their coins and the whole market cap is a great resource for the Coin Market Cap. You can see all 700 fly-by-night altcoin there. An altcoin is another way of saying any non-Bitcoin cryptocurrency. By now you probably know that Bitcoin is like the Rose Bowl, the grandfather of it all! I would really try to limit my attention and research to the top 10 for now. It’s not going to be a success story for one of them that is worthless now. Finding one is like picking the right penny. It’s much safer to stick with companies that are being recognized by leading analysts. The same goes for the exchange you use to buy, sell, and trade. That’s why I use Coinbase to make my business the most reliable, secure, and convenient exchange for my business. They also have the most in-depth analysis process when it comes to adding Altcoins.
Here is a summary of the key points in this article:
-Bitcoins come from mining
-Mining is done by powerful machines that solve complex math problems. You can also buy contracts called cloud mining if you don’t want to buy a machine.
-Problems are more difficult as coins are extracted and the rate of production slows down
-Since May 2017, only 72 Bitcoins are issued per hour (12 every 10 minutes)
-On June 23, 2020, it will be halved again to only 6 every 10 minutes.
-Almost 80% of the finite number of 21,000,000 coins in Bitcoin has already been issued.
-Competition between miners and increasingly complex mathematical problems make it difficult to turn profit mining
-The last coin is believed to have been minted in 2140