– Mom, where do bitcoins come from? Well, you see, when a shiny young Bitcoin catches the eye of an ambitious miner and because they love each other very much …
Wait, this is obviously too hard to solve here. Also, my whole goal is to make everything simple. In any case, bitcoins are produced by solving complex math problems. This is done by a powerful machine designed to solve these math problems. This process is called mining. People who have these machines to make money by digging bitcoins are called miners. When the problem pack is resolved, it becomes known as a block. The blocks are checked by other users, and after checking them, they are added to the so-called block chain. This circuit continues to grow and a new block is added to it about every 10 minutes. This chain is really just a basic book that will continue to grow and never end.
Very powerful machines that dig up consume a lot of energy and increase the mine’s monthly utility bill. The reason it takes so much strength is the genius of mathematics. This requires the mining machine to perform complex cryptographic algorithms. When the machine solves a math problem, a block of coins is born. Each time 210,000 blocks are created, the miner’s pay is halved. It takes 4 years to achieve this. So it’s similar to the Bitcoin Olympics. Currently, the block reward is 12 bitcoins (on June 23, 2020, the reward will be only 6 coins). Those coins go to the miner whose car was the lucky lottery winner at the time. Every 10 minutes there is a winner. There are also many miners competing there. The said miner now has something valuable. I have enough coins and you will pay the electricity bill and then a few.
There is another way for me. This is called cloud mining. With this type of mining, you pay for the use of someone else’s network and this greatly reduces your profits. The positive side of this method is that it does not require the use of electricity or even the purchase of a machine.
Sounds good to me. I want to start digging now. Is this a good idea and can I get a passive income on a regular basis? Can be. For now, hold on tight and you can call later.
Let’s try to break it down.
Returning to the original way of digging machines, you should start by buying a quality mining machine. That would return about $ 2,000. Here is a picture of a good machine (Antminer S9 from Bitmain) that can create a high hash speed of 14 TH / s. 1 TH / s is 1,000,000,000,000 bags per second. This machine does it 14 times. This is a great stir force. The hashes are just a really long number that the machine generates each time it tries to solve the algorithm. Again, I would like to take advantage of my lottery analogy, all of these slot machines are where you expect to become the next winner.
Then, as competition increases, your chances of winning become increasingly difficult. What makes it even more difficult is that each time you solve a math problem, the next problem gradually becomes more difficult to solve. Bitcoin network difficulties change approximately every two weeks or 2016 blocks. The number of bitcoins ever created is limited. That number is 21,000,000. Once we reach that number, another Bitcoin will never be mined again. However, the block circuit itself will continue to expand as it is used to verify every transaction or purchase.
Remember that pseudonym Satoshi Nakamoto that I also wrote about? Did you know that solving math problems for machines today is more than 70,000 times harder than we were when it was 2009? The final coin is expected to be minted in 2140 as the system halves every four years (210,000 blocks). 16,400,000 coins have already been mined (78%) and each coin will be mined much more slowly from now on. Yes, you read that right. Basically, 80% has been mined in the first 8 years, and the final 20% will need to be extracted in more than 100 years. If any of my cool, cool, and great-grandchildren read this, I hope you’re sitting nicely with our family’s bitcoins, which are now worth 220,000 for Bitcoin. We can all dream right!
Buying a mining machine or buying a mining cloud contract is risky. While there are some great success stories, be sure to research them carefully before deciding if mining is right for you. For every person who makes money, there are many people who lose money.
By the way, a great place to see all the cryptocurrencies there, their common coins and the market cap. The coin market cap is a great resource. You can see all 700 plus flight after night altcoins. Altcoin is just another way to tell any cryptocurrency coin that is not Bitcoin. Now you probably know that Bitcoin is like the Rose Bowl, the grandfather of all! Definitely now I would try to limit my attention and research to the top 10. Not that there won’t be stories about one of almost nothing worth now. Just finding one is like choosing the right penny stock. Choosing companies recognized by key analysts is a much safer game. The same goes for the exchange you use to buy, sell and trade. That’s why I use Coinbase for my transactions, because they are the most reliable, secure and convenient exchange. They also perform the most thorough inspection process when altcoins need to be added.
Here is a summary of the most important points of this article:
-Bitcoins are created from mining
– Mining is done with powerful machines that solve complex mathematical problems. You can also buy contracts called cloud mining if you don’t want to buy a machine.
– Problems are getting worse as coins are mined and production speeds slow down
– From 2017 May. There are only 72 bitcoins extracted per hour (12 every 10 minutes)
– 2020 June 23 This will again be halved to 6, created every 10 minutes
-Almost 80% of Bitcoin’s finite number of 21,000,000 coins has already been extracted
– Competition between miners and increasingly complex mathematical problems make it difficult to make a profit
The final coin is expected to be mined in 2140