Paper money gets printed whenever a government decides to print and distribute it. Bitcoin requires a special software to solve math problems in order to issue a certain number of coins in exchange. The process is called mining and it is very important to keep the network safe and secure.
How it works?
People are transacting Bitcoins every second and someone needs to keep a record of these transactions. The miners are forming the Bitcoin network and they are collecting all the transactions made. Each transaction is inserted into a block and every 10 minutes a block is packed. All the blocks are forming the blockchain, which means that all the transactions ever made on the Bitcoin network are there. The block reward started with 50 BTC/block, halving every 4 years and today is 12.5 BTC/block.
The difficulty is a measure of how difficult it is to find a hash. The more miners join the network, the block discover rate increases and the average mining time decreases from 10 min. Every 2 weeks the target value is recalculated. This helps the average mining time to go back to normal. That is why in 2009 with a laptop you could make hundreds of Bitcoin per day (also the block reward was at 50BTC/block) because the difficulty was at a very low scale.
How to start?
Miners have developed a special computer for Bitcoin mining called ASIC (Application-Specific Integrated Circuit) over time. These computers are so powerful that they eliminated all the personal computers out of the network. In other words, it is not profitable anymore to mine with a personal computer (even it is GPU) because the electricity bills are much higher than the reward. Also, it is impossible to get any reward if you decide to start mining solo (without sharing your hashrate with a pool).
However, if you decide to invest into an ASIC be aware that you might be caught into a loop: hashrate and electricity bill. Unless you have very low fees for electricity and at least $1500 to invest for an ASIC, don’t bother mining Bitcoin.
If you are really into mining the best solution for you is to start looking for alternatives. Start mining altcoins. In the next article we will talk about cryptocurrency mining. Meantime, keep an eye on our offers, we are mining the most profitable coins and pay you in Monero, the most private altcoin and open source concept.