Bitcoin Mining 101
What Does it Take to Mine My Own Bitcoin?
Over the past few years, Bitcoin has enjoyed a steady rise in value. As a result, more and more people have become interested in purchasing Bitcoin, whether as an investment, for political reasons, or some other goal. And if you’ve bought some yourself, one thought that’s probably popped into your head is, “Can’t I just mine my own Bitcoin?”
Mining Bitcoin vs Gold
If we compare it to mining gold or some other mineral, you might think it would cost you less to go to the mines and get a chunk of gold than to purchase a similar piece. But you have to take into account how much it costs to mine the material. You usually can’t just walk into a cave and rip a piece of gold out of the wall. Instead, you have to purchase mining materials, like pickaxes, flashlights and helmets, not to mention the investment of time required.
Mining Bitcoin is similar in a lot of ways. You can’t just sign up to mine Bitcoin and be done with it. You still have to make an investment. But rather than purchasing pickaxes, you’ll be purchasing computing power.
Solving the Puzzle
To lay the groundwork for understanding what Bitcoin mining is, you could think of it like solving a complex puzzle or equation. The first person to figure out or verify a “block” (one component of the blockchain) gets a reward, which is Bitcoin. The hard thing is, these puzzles aren’t easily solvable by the human mind because a lot of the process is pure speculation, like guessing how many jellybeans are in a jar until you get the right answer. Because of this, specific mining computers have been made with the sole purpose of computing and solving these extremely complex puzzles.
This mining process of solving “puzzles” not only gives Bitcoin value by making it hard to attain, but also actively validates and authenticates the Bitcoins being put into circulation. Very rudimentarily, Bitcoin miners are getting rewarded with Bitcoins for maintaining their authenticity.
Race to the Reward
To even get a reward, a Bitcoin miner needs to verify 1MB worth of transactions. And remember, this is a race, so you need the fastest computer processor, RAM and graphics card available. You wouldn’t be the only one trying to solve the same equations, and just the computer that solves them first will reap any rewards. Getting the right answer before any other computer is primarily based on luck and speed, and it isn’t easy to win the game anymore.
Beyond being difficult, the market for mining Bitcoin is extremely saturated. There are entire warehouses, or mining farms, filled with banks of expensive computers solely dedicated to mining Bitcoin. Home computer setups just aren’t practical these days, so if you don’t want to dedicate a ton of time, money and computing power to mining Bitcoin, it’s probably better to purchase your Bitcoin from someone else instead.
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What is Coin Cloud?
Founded in 2014 in Las Vegas, Nevada, Coin Cloud is the leading digital currency machine (DCM) company globally. With over 2,000 locations nationwide, in 47 states and Brazil, Coin Cloud operates the world’s largest and fastest-growing network of 100% two-way DCMs, a more advanced version of the Bitcoin ATM. Every Coin Cloud DCM empowers you to quickly and easily buy and sell 30+ virtual currency options with cash. You can find your nearest Coin Cloud DCM here.