Cryptocurrencies are among the most controversial and hotly debated subjects in 21st century. There are several countries that have banned cryptocurrencies, as it is believed that they can be a threat to the traditional financial system. Many governments fear that cryptocurrencies can undermine the value of their national currency.
For the average individual, cryptocurrency is often a complicated subject. Most people are attracted to cryptocurrency, primarily due to its high valuation. For example, if we consider Bitcoin, it is currently valued at USD 54,801. Another thing is that value of Bitcoin has consistently increased, even though there have been fluctuations in its pricing.
If you have funds, you can buy Bitcoin anytime you want. You can also earn it through Bitcoin mining. The process may seem confusing at first. However, with time, you shall be able to get a hang of it. To get you started, here’s a quick guide on how to mine Bitcoins.
Auditing transactions – In simple terms, Bitcoin mining is largely about verifying the authenticity of Bitcoin transactions. This is a way to keep the system safe and prevent issues like duplication. For the effort you put in, you could be rewarded with Bitcoin. However, please note that earning Bitcoin is a challenging and time consuming process. You cannot be in Bitcoin mining for quick money. You will have to work hard, just like in any other job or business.
Solve complex problems – Bitcoin is created, sold, and purchased in the virtual world. The system is hugely complex. It is getting even more complicated, as more users have started investing in Bitcoins. This has presented numerous technological challenges related to record keeping, data storage, security, etc. You can earn Bitcoin if you can come up with practical solutions for these technological challenges. The basic objective will probably be to simplify processes and make it more affordable. You will be competing with other miners, who may be working on the same problem. You will have to be the first to find the solution to earn Bitcoin.
Creating new currency – As a miner, you will receive Bitcoin that are newly created. You will not be paid from the Bitcoins that are already in circulation. In effect, you will actually be minting Bitcoin when you work as a Bitcoin miner. Excluding the initial block that was created by Bitcoin founder Satoshi Nakamoto, rest all other Bitcoins currently in circulation have come through mining efforts.
Computing power – As a Bitcoin miner, you will have to go through voluminous amounts of data. For that, you will need high level of computing power. Your standard PC or laptop is unlikely to be able to do the job for you. Even if it can, it will take forever to earn your first Bitcoin. You will need powerful computing machines such as an application-specific integrated circuit (ASIC) or GPU (graphics processing unit). Based on their computing power, these can cost anywhere from USD 500 to thousands of dollars.
As is evident, mining Bitcoin is no easy task. You will have to invest some money and make consistent efforts. It’s quite similar to a gold rush, where you work with limited resources with no guarantee of finding gold. Keep these things in mind before you start mining Bitcoin.