Can Bitcoin Still be Mined – How it’s Done
Can Bitcoin Still be Mined
Since its inception, bitcoin has increased by over 900%. The digital currency is at an all-time high of $9985, and it shows no signs of stopping so much so that some are predicting that it is in a bubble that is soon going to burst.
Early on, it was easy to mint and buy bitcoins. Early miners who exercised the patience to keep their coins could easily cash them in now for tens or hundreds of thousands of dollars. However, it is doubtful that many such people exist who beat the urge to sell at the many high price points in the cryptocurrency’s history.
In reality, many are those who rue the missed opportunity and are wondering whether it is possible to mine bitcoins now and earn a $10,000 asset, which could continue appreciating.
The short answer is yes, it is possible to mine bitcoins and they are still being mined. However, things are not as simple as they sound and for you to understand why, it is necessary to first lay the groundwork.
How bitcoins are mined
The bitcoin creation process mimics the mining of mainstream precious commodities i.e. gold, silver, etc. The goal was to ensure that the mining process was steady to avoid currency influxes that would harm the overall value of the digital currency.
To mine a bitcoin, you have to solve a complex mathematical puzzle. As you can imagine, solving these puzzles takes time and is resource intensive. Once you solve the problem, other computers in the system have to verify that indeed your solution was arrived at using the due process and that it is correct. After verification, you earn BTC25.
Why it was easy to mine bitcoins during the early stages
The blockchain system is such that in its infancy, it is fairly easy to solve the mathematical problems since they involve probability. At the onset, the likelihood of finding solutions is favorable, but as more and more answers are found, the possibility reduces and consequently, the computing power required to mine increases proportionally.
As of now, there are about 11 million bitcoins in the entire digital space. The total number of bitcoins that can be mined, at which point there would be no more mathematical puzzles to solve to create the currency, are 21 million. From this perspective, it becomes clear that the probability of successfully mining BTC now has reduced by half since its inception.
How you can mine bitcoins
To mine bitcoins, therefore, you have to amass computing power and this translates to high costs. High-performance computer parts are not cheap – high-grade processors currently cost around $1000. Add to this the fact that elevated computer performance demands high power and the costs of mining can easily balloon out of proportion in comparison to the bitcoins you might generate.
More than that, there is the issue of security and digital security is costly. Remember that bitcoins are digital, and anything digital is prone to hacking. If you mine and do not take the necessary precautions, you may gift a hacker your hard earned coins.
To efficiently mine BTC, many people choose the rig option which is somewhat more feasible. In this arrangement, you source for many average computers and link them together to combine their computing power. The ‘supercomputer’ you develop is then better placed to mine bitcoins.
How professional miners do it
Those who are all-in in the mining business look for a location where the costs are more conducive. They ensure that power costs are low, policies are supportive, and the place is secure especially if they store the coins in ‘cold-storage’ which is internet speak for offline.
Once a conducive environment is created, they then assemble powerful supercomputers which can crunch numbers quickly and efficiently. Since many people cannot afford the outlay of such a venture, a more popular approach has been the combining of computing power in pools. In this manner, stakeholders increase their chances of earning the cryptocurrency given a well-defined arrangement of sharing the proceeds.
Do a cost-benefit assessment
Before you get into mining, consider your financial position and scalability. Factor in that at some future point, there will be no more coins to mine in addition to the increasing difficulty of solving the puzzles that birth the coins. Conduct a comprehensive cost-benefit analysis, or you might be left holding the short end of the stick.
There are options
If it is making money off bitcoins that you are interested in, consider other options that are less capital intensive such as shorting, and trading. Some reputable sites, such as bitgale.com, run quality blogs that offer solid insight and direction on how to go about it.
Alternatively, you could invest in mining another types of coins which are not as resource intensive as bitcoin such as Litecoin, Zcoin, Ethereum, Dash, Ripple, Monero, among others which are very promising. In closing, there is no shortage of horses that you can back with a view to emerge victorious in the race to accumulating wealth through cryptocurrencies as long as you practice shrewdness.
