Is Bitcoin mining the new gold rush? Can you make your laptop work for you as a crypto miner?
Bitcoin uses blockchain. Transactions are anonymous. How can you verify the transaction? Easy. Create a math algorithm to validate it. When you but or sell Bitcoin, you wait several minutes for the transfer to “check.” In the miner network, computers get bitcoin rewards for solving these math problems. All you need is a device to solve these equations and boom! You’re printing money. The faster it works, the more you earn. At least, that’s how good it sounds in theory.
What Is Cryptocurrency Minning?
Bitcoin is designed to be unhackable. Your moves are anonymous, there’s no regulation, and transactions are permanent. If you want to buy or sell crypto, bitcoin miners need to verify it. Every verification earns a reward in satoshi, which is the smallest bitcoin unit. If you want to earn one bitcoin, you need to double-check thousands, if not millions of math algorithms. But what is mining compared to trading? Can you make money with it? Should we all mine bitcoin? That’s the catch. There will always be only 21 million coins to protect from inflation. Every time a new miner joins the network, it takes more steps and time to verify a transaction block. Algorithms become exponentially complex. To make things worse, mining rewards halve every 210,000 blocks. Miners constantly need to update their technology to double the hash-rate. Only to get back to the same spot. After mining $18 million coins, miners generate one block every ten minutes, give or take. 144 blocks per day. Unless we discover some innovative technology, most experts don’t expect to mine the last Bitcoin until 2040.
Bitcoin Mining Challenges
For many reasons, mining can become as challenging as day-trading. Bitcoin miners need the best technology to get the best results, such as the new ASIC chips. #1 Technology Back in 2011, you could mine Bitcoin from home. Your laptop processor would be enough to generate many blocks per day. As more miners join the net, Bitcoin rewards halve, and miners need to work faster to keep their pace. They switched to gaming computers and then to ASIC chips. You won’t profit from mining unless you have the latest processor. With the average computer, it may take years to mine one bitcoin. It takes more money to power the computer than the money you would make! #2 Security In the early stage, when algorithms were simpler, hackers could easily get through security and change the code. You will hear countless of hacking cases from 2013 and 2014. Few people used bitcoin at that time, but if it happened today, it would scare many investors. Thankfully, today security has increased. Miners may profit less from the activity, but the system is more protected than ever. That doesn’t mean there won’t be more attacks though. The increasing value of Bitcoin could attract potential hackers and do the impossible.
Bitcoin mining software is not what it used to be, which is good in its way. As mining speed decreases, we can expect the Bitcoin price to stabilize. That could turn it into a global currency and make it priceless. Even if there are no Bitcoins to mine, there’s always profit opportunities. In history, people have made more money trading it than finding gold underground.