The Ultimate Fever!
Is very common to hear from different sources that you have two ways to earn money through Bitcoin and other cryptocurrencies. One of them takes place when you purchase and sell these coins at a higher value in the market and the other one is through the Bitcoin mining, the most powerful computational network existing nowadays.
This time we will present you everything you need to know to discover if the Bitcoin mining can be profitable for everyone, how secure it is and what does involve. Is time that you discover all the activities involved in the cryptocurrencies’ field, because this is a great opportunity to understand even more the market, the way it works and how many agents are involved in its functioning.
The Purpose of Mining:
In any traditional monetary system, the governments just print more money anytime they need it. However, in the Bitcoin world, the money is not created, but discovered. The Bitcoin mining is the fact of discovering more bitcoins while helping with the functioning of the Blockchain System.
People send Bitcoins from one place to another in a constant way, generating a transaction. However, unless that someone registers all these transaction, nobody could really proof who have paid what in a determined moment. Bitcoin web manages this by leaving a register of all transactions made in a period, inside a list that is called “block”.
In this manner, the work of miners is to confirm these transactions and register them in the “major book” or block chain, acting like a web of digital counters that work to keep all the registers true and updated.
The block chain that contains all the transactions has to be trustable because everything is digitally sustainable, so is necessary to guarantee that it remains true and nobody manipulates it.
This is the part where the miners take place; when a block of transactions is generated, they obtain the information, and then apply a math formula to turn it into a different piece of data denominated “hash”, which is a sequence of numbers and letters. The hash is stored with the block that is incorporated in the last place of the chain in that moment.
Cooperation taken to Another Level:
Miners use computers that help them to solve mathematical problems that emerge every 10 minutes. This kind of problem follows the same pattern in its process but the variables are different and it only can be solved by trying random numbers until get to the result that the algorithm needs.
In this activity thousands of computers compete all over the world, and with the evolution of this technology, the math problems are becoming more complicated, for which miners have had to invest in better processors, hardware’s and software’s for the computers they use.
By solving the problems, miners help the “Blockchain” technology to approve transactions or reject those that aren’t valid for the system. If someone tries to fake a transaction by changing a block that was already stored in the chain, the “hash” of that block would change too.
In this manner, if someone tries to check the veracity of this block, he only would have to apply the math function finding out that the hash is different in relation with the previous that was already stored with the block in the chain. Therefore, this new block will automatically be identified as false.
The Creation of Money through Bitcoin Mining:
This is the part that everyone want’s to know. Why everyone is so interested in “helping” with the good functioning of Bitcoins? This is because the people who solve the problem first, gets a reward in cryptocurrencies that can be changed for any other regular currency or stored for savings.
This “prize” motivates people and teams to invest time and money to find new and better processors, the best plan of electricity, conditioned spaces and time. Miners seal the blocks before they are incorporated into the chain and everyone compete to obtain this, using a software specially written to mine blocks.
Anytime someone creates a “hash” with success, it obtains a reward in bitcoins, the blockchain is updated and everyone in the web is notified about it. The idea is having all the features that make you the faster in the market, which add a “seek for efficiency” sense to every agent that takes part of it.
The result is a safer system, faster transactions, and people who is rewarded in their electronic wallets with amounts of bitcoins for supervising and helping the network to fulfill their purposes in the financial market.
Can anyone be a Bitcoin Miner?
When the bitcoins were created in 2009, mining was very easy. Just by using your own computer, you could spend few minutes solving one of these problems. However, through the evolution of the Blockchain technology, the problems have become more complicated, requiring extra tools.
In theory, you could try this at home, in your own computer, but you need to know that we are talking about thousands of computers around the world, competing to solve the problems in the minor time possible. You probably don’t see much profit from this way.
In fact, many people have realized about this and started to create “pooled mining” which combines the work of different miners toward a common goal that is solving the problem quicker than the rest, distributing the reward between the members of the team.
We can say that unless you join a pooled mining and dedicate a lot of time and resources to understand the bitcoin market and the blockchain technology, this is not an easy way to make money nor a profitable hobby. There is a great competition out there with investments of thousands of dollars to leader the miner market.
However, you don’t lose anything by trying it with the resources you already have at home. Nowadays, you can find multiple downloadable programs that runs in a secondary place, using a common video card called “GPU” inside your computer, which means that you can make your normal activities while your PC is trying to mine bitcoins.
The truth is that the mining of bitcoins it still profitable but its incomes are very inaccessible for regular people. For those who started at least 7 years ago and trusted in the cryptocurrencies, this was probably the best decision they have ever made. However, at a little scale, this activity is over because nowadays, the mining is a whole industry of big farms and enterprises with which is impossible to compete!