Like any other people, you are one of those many are puzzled with Bitcoin. It shrouded in a jargon, it borrows physical metaphors adding more confusion to people.
Bitcoin talks about “coins”, but no physical thing that you can hold at all.
In Bitcoin you will hear “miners”, though there’s no actual digging or even drilling going on.
As you go along with your Bitcoin journey, you will encounter “blockchain”. This makes more people shake heads with their confusion. To tell you,
even the Bitcoin community does not even know who invented Bitcoin.
But there are definitions for Bitcoin available and even your five year old child can understand the term. So how do we say, Bitcoin is just another form of online money. Its value changes from time to time.
If we to describe, it is a “digital gold” that is virtual, in other gold in the digital world.
Anyone can buy and sell it, or even exchange goods and services in the real world, there are not so many businesses using them but the good things is that they are growing.
This is pure digital trade, no real coins or even notes done in hands.
And if you plan to cash it out, you will have to pay for a certain fee.
So much for the introduction, let us get straight. When you send dollar to a certain individual elsewhere online, the involved bank usually verifies the transaction done and will take fee for the service rendered. Your hard earned money for sure is in the hands of institution.
In Bitcoin, this can be sold or even bought without those organizations. It does by distributing your trust in an organization across system to many people. Trust is then shared out, we are sure that digital transactions are legit and secure by encoding them in a shared ledger posted in public, this one is a huge digital open book.
Since it is open, this ledger is not just secure but also transparent. This is not owned by a certain corporation. This one is shared and keeps updated by the communities in the Bitcoin world.
The good thing is that, no one will charge you about the transactions recorded into the ledger. Instead those who verify about its reliability and truthfulness of the transactions are from the Bitcoin miners.
Transactions made by the Bitcoin were verified in order to mark complete, and Bitcoin is rewarded for those who have succeeded.
This competition is clever that involved high stakes and winner takes the Bitcoin and keeps the whole thing working reliably.
Not all Bitcoin has been discovered yet, but for the meantime if you don’t have any, you can buy them in the market. The value is increasing over the past years. Bitcoin that are not yet discovered are from people who are “mining” to get one.
Bitcoin is not infinite. There was a finite amount set on it, it was 21 million. As to date, more than 12 million are circulating.
This means that fewer than 9 million Bitcoins are waiting out there to be discovered.
There are certain individuals and businesses that buy and sell existing Bitcoins. There are also people who purchase goods and service with their Bitcoins, some exchange it back into real cash. And some are engage in mining so they can discover new Bitcoins.
How they mine Bitcoins?
Like what real miners do, “mining” aims to discover new precious metal. The same thing applies with Bitcoins.
In digital mining, this is done by transaction verification of Bitcoin, easy than you think, but it is not about single transaction that needs verification, but instead a large number of transactions gathered in the box with a virtual padlock called “block chains”.
Bitcoin miners’ enthusiast run software for them to find the key that will unlock the padlock.
So when it is achieved fresh Bitcoins are then released as reward.
The blocks are in the Bitcoin garden, miners should keep the game functioning by verifying the transaction and keeping the ledger true, doing it will enable your system to find unreleased Bitcoin.
I remember during my early days in the online world, I read many articles about Bitcoin. And all points to one proposition, it was way easier to mine Bitcoin in the past. Reason, there are fewer miners doing it. But as Bitcoin grows and expand, more and more people become interested with the digital gold mining.
People even group together and created “pools”, sharing expensive hardware, processing power and the cost of electricity for the operation in finding digital gold or Bitcoin.
As you see, finding Bitcoin now is not that easy just like before. To tell you frankly, “only those who are centralized Bitcoin miners will get the profit”.
Is it still worth becoming a Bitcoin miner?
Let us answer the question by quoting opinion to some of the digital drillers and diggers.
“It took ages for some people to mine Bitcoin because of the enormous number of competent people mining with their excellent machines”.
As written above, mining has become tougher and even more competitive. Even on forum new miners with low starting investment on excellent machines are not advised to do it.
But instead, you can join a certain “pool”, people who are mining together, considering each one of them has impressive mining kit.
Hint: you need to set-up hardcore computer system that can run 24/7.
If you can’t afford such extreme machines for your Bitcoin mining plan, there are alternatives like Quarkcoin or the Litecoin. These mentioned alternative digital money to mine becoming competitive as well.
So like Bitcoin in the past, when this evolve it will become competitively turbulent in the future. If you are staring out as miner, better go with these latest alternatives.
Unless you not ready to invest on serious mining rigs, investment on time and money for your mining is not the little guy anymore.
Bitcoin is now institutionalizing on a centralized group and may replace other currency.