Who Makes Bitcoins
Bitcoins can be 'minted' by anyone in
the general public who has a strong
computer. Bitcoins are made through a
very interesting self- limiting system
called 'mining'. It is self- limiting, because
only 21 million total bitcoins will ever be
allowed to exist, with approximately 11
million of those Bitcoins already mined
and in current circulation.
Bitcoin mining involves commanding
your home computer to work around the
clock to solve 'proof-of-work' problems
(computationally- intensive math
problems). Each bitcoin math problem
has a set of possible 64-digit solutions.
Your desktop computer, if it works
nonstop, might be able to solve one
bitcoin problem in two to three days,
likely longer.
For a single personal computer mining
bitcoins, you may earn perhaps 50 cents
to 75 cents USD per day, minus your
electricity costs.
For a very large-scale miner who runs 36
powerful computers simultaneously, that
person can earn up to $500 USD per day,
after costs.
Indeed, if you are a small- scale miner
with a single consumer-grade computer,
you will likely spend more in electricity
that you will earn mining bitcoins.
Bitcoin mining is only really profitable if
you run multiple computers, and join a
group of miners to combine your
hardware power. This very prohibitive
hardware requirement is one of 7 biggest
security measures that deters people
from trying to manipulate the Bitcoin
system.
Tommorow will be touched
Day 3
Chapter 1
Why Are Bitcoins Such a Big
Deal?
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