Just like gold, Bitcoins are mined. They are currencies that when adequately mined, can set you up for life. When they first came in back in 2009, not many people were interested. Besides gaining the attention of techies, the coins went unnoticed. At the time, not only was a Bitcoin price meager, but mining was also easy. That is actually how the system was created. Mining was supposed to be easy when starting out and harder as time goes by.
What is interesting is the fact that only 21 million coins were created and so far, over 16 million have been mined. This means only 20% of the coins are left. This shows why the price of Bitcoin is increasing year after year.
What usually happens is when people buy the coins, they are set up with a Bitcoin Wallet, which is like an app you install onto your computer or phone. The app is where all mining activities take place. You will be given an address that you can use to conduct Bitcoin transactions.
Bitcoin mining, what is it?
Bitcoins are obtained in one of three ways:
- Buying from Exchanges
- Trading with goods, services or other forms of cryptocurrencies like Litecoins
Mining requires people to discover new coins through a process of verification of transactions. When the miners verify Bitcoin transactions, which involve opening a padlock known as a blockchain, they are given new coins as a reward. That is simply how Bitcoin mining works.
The process may appear simple; however, it requires a lot of stellar computer skills. That is why most people prefer to find out how to buy Bitcoins instead of learning how to mine them even though mining increases their Bitcoin value. Additionally, mining has been made harder since it started given it recently takes more than a million tries to unlock a blockchain. In the past, a few tries would do the trick.
Bitcoin in Canada: How are people mining there?
Canada is thriving in the Bitcoin industry. While some are turning their Bitcoin to Canadian dollars, others are mining the coins to create sustainable energy for the nation. This is evidence of the different reasons people get into the Bitcoin industry.
Canada is well past the stage of wondering where to buy Bitcoins and such forms of basic questions. They have created so much awareness on the coins that everyone knows how to buy Bitcoin in Canada. More than owning a Bitcoin wallet and stacking it with coins, most have invested in mining software that mines the coins on its own.
One such software is the GUIMiner. The software runs on its own as long as your computer stays on. Miners need to make sure their computers are powerful and run very fast to mine coins quicker. This means a lot of heat is generated by the computer, which is how some miners have sought to use that heat for sustainable purposes such as promoting fish farming.
Bitcoin Mining disadvantages
Bitcoin in Cad money or any other form of currency may be a great motivating factor to get anyone into the Bitcoin mining business; however, there is a downside to this venture.
- Mining gets harder as the years go by since every year, the number of unlocked blockchains reduce by half.
- Aspiring Bitcoin miners have to part with a huge amount of money to invest in a mining software that mines the coins.
- The mining software has to run constantly to increase the chances of unlocking a blockchain and earning the coins. This means using huge amounts of electricity.
Before getting into Bitcoin mining, consider these disadvantages to determine if it is your ideal investment. It is like gambling. Either you will earn so many coins that will cater for all the expenses and leave you with plenty of money to spoil yourself, or you will end up investing too much and getting nothing in return.