“Mom, where are Bitcoins from?” Well, you see, when the bright young Bitcoin catches the eye of an ambitious miner, and they love each other so much …
Wait, it’s obviously hard to fix that here. Also, my whole goal is to keep things simple. However, bitcoin solves complex mathematical problems. It is made by a powerful machine built to solve these math problems. This process is called mining. People who own these machines to make money bitcoins are called miners. When a set of problems is solved it is known as a block. Blocks are checked by other users and once checked, they are added to the so-called block string. This chain continues to grow and a new block is added to it approximately every 10 minutes. This chain is just one major book that will continue to grow and never end.
The very powerful machines that use mine crush a lot of power and raise the miner’s monthly bill. The reason for gaining so much strength is the genius of mathematics. Mining machines require complex cryptographic algorithms. Once the machine has solved the math problem, a coin block is created. Each time 210,000 blocks are created, the miner’s reward is halved. It takes 4 years to complete this. So Bitcoin is like the Olympics. Currently the block prize is 12 Bitcoins (on June 23, 2020 the prize will be only 6 coins). These coins go to the miner who was the lucky winner of the lucky lottery at the time. The winner is every 10 minutes. Many miners are also competing. That miner is worth something. You pay as much coin and electricity bill as you want and then.
There is another way for me as well. It’s called cloud mining. With this type of mining you pay for using someone else’s network which in turn significantly reduces your profits. The positive side of this method is that it doesn’t even require you 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. You can still hold on tight and make that call later.
Let’s try to break this down.
Going back to the original mode of machine mining, you should start buying a quality mining machine. That would return about $ 2,000. Here is a picture of a good machine capable of generating a high hash rate of 14 TH / s (Bitmain’s Antminer S9). 1 TH / s is a 1,000,000,000,000 second hash. This machine does it 14 times. That’s a great powerhouse. A hash is just a very long number that a machine creates every time it tries to fix 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. This issue is even more difficult because every time a math problem is solved, the next problem becomes more difficult to solve. The difficulty of the Bitcoin network varies approximately every two weeks or 2,016 blocks. The number of Bitcoins that will ever be created is finite. That number is 21,000,000. When we play that number, there can never be another Bitcoin taken out again. However, the blockchain itself will continue to expand because it is used to verify each transaction or purchase.
Remember that nickname I wrote Satoshi Nakamoto too? Did you know that today’s math problems are more than 70,000 times more difficult to solve than machines when they solved 1. He extracted Bitcoin in 2009 ?! It is estimated that the last coin will be mined in 2140 because the system is halved every four years (210,000 blocks). Already 16,400,000 coins have been issued (78%) and from now on each coin will be extracted at a much slower rate. Yes, you read that right. Basically 80% was extracted in the first 8 years and it will take more than 100% to extract the last 20%. If one of my two great-great-great-grandchildren reads this, I hope he’s pretty seated with our family’s Bitcoins now worth 220,000 per Bitcoin. We all dream well!
Buying a machine for mining or buying a mining cloud contract is dangerous. Although there are great success stories, make sure you research them thoroughly before deciding whether mining is right for you. There are a lot of people who are losing money for every person who makes money.
By the way, a great place to see all the cryptocurrencies out there and their coins and full market capital, the Coin Market Cap is a great resource. You can see all the 700 night fly algae there. Altcoin is another way of saying that Bitcoin is not a cryptocurrency. By now you probably know that Bitcoin is like the Rose Bowl, the grandfather of it all! I was really trying to limit my focus and research to the top 10 for now. It will not be the success of someone who is worthless. It’s just like finding the right penny stock to find. Continuing with fixed companies that leading analysts are recognizing is a much safer game. The same goes for the exchanges you use to buy, sell, and exchange. That’s why I use Coinbase because it’s the most reliable, secure, and convenient exchange for my trades. They also have the most accurate analysis process when it comes to adding Altcoins.
Here is a summary of the key points of this article:
-Bitcoins are generated from mining
-Minematics is done by powerful machines that solve complex problems. You can also buy contracts called cloud mining if you don’t want to buy a machine.
-The problems get harder as the coins are extracted and the production rate slows down
-In May 2017, only 72 Bitcoin per hour are extracted (12 every 10 minutes)
-On June 23, 2020, this will be halved again to 6 generated every 10 minutes
-Almost 80% of Bittono’s 21,000,000 fixed coins have been mined
-Competition between miners and increasingly complex mathematical problems that are making it difficult to reverse profit exploitation
-It is estimated that the end coin will be exploited in 2140