What is a Cryptocurrency?
It is a form of digital currency, which needs to be encrypted in order to be generated in units of currency and to be operated independently.
What is Bitcoin?
Bitcoin is a form of cryptocurrency, which is not tied to any bank or government and anyone can spend the money anonymously. The coins are generated by the users who ‘mine’ them.
Is Bitcoin Mining Profitable?
Bitcoin is considered Digital Gold and has high potential in the web market. When you mine and earn a bitcoin, it is like earning gold. The value has seen a tremendous increase – Bitcoins currently hold the highest ROI (Return on Investment) among all tradable commodities.
Bitcoin is the Future
The major advantage is, they are decentralised, anonymous and free from all clutches of banks and governments. Bitcoins can be used to buy anything online or offline, from a product on the dark web to an apartment in a legal country. Bitcoins can be used to do anything, and nobody has any control over these transactions.
The Bitcoin Mining Process – How to Earn Bitcoins?
Bitcoin are created digitally and held electronically. So to mine a bitcoin, you either have to create a bitcoin or get hold of one. So, either you have to trade bitcoins, or mine it.
1. Trading Bitcoins (Buying Bitcoins)
You can buy or sell bitcoins in the country, however, it will through an International Exchange. These exchanges allow Bitcoin transactions after proper verification of identity. You can use your Credit or Debit Card to buy them and can sell them whenever you want it. The amount can be withdrawn to your registered Bank Account. Generally, this is called a Bitcoin Wallet.Some of them include
- EX.IO
- Coinbase
- Zebpay (Indian Website)
- Coinmama
- Kraken
- Unocoin (Indian Website)
- Bitstamp
- Bitit
2. Mining Bitcoins (Creating Your Own Bitcoins)
Yes, you can make your own money, and that too as much as you want. All you need is a proper setup, and you can start mining your own bitcoins.
Step 1. Setup (Hardware / Cloud)
You can have a setup either by yourself or get a cloud service to mine coins.Hardware – You can use your own computer to mine coins, but you will soon run into a loss because of low producing capacity and high electricity costs. You can mine alternative cryptocurrencies like Monero, Bytecoin, DASH and others, and later convert them to Bitcoins using Cryptonator or get your own ASIC Miner like BITMAIN (which would cost you around Rs. 85,000) and start mining.Cloud – There are mining companies around the world who offer cloud services. They are way cheaper compared to having an own physical setup. You just need to sign up and buy hashrates. They charge a one-time fee and will charge for daily maintenance and offer you a lifetime or one or two-year contract.
- Genesis Mining
- Hashflare.io
- Hashing 24
- NiceHash
- GEOVIA Minex™
These websites are trustworthy, with no scam history.
Step 2. Download a Free Bitcoin Mining Software
Once you are done with the setup, get a free program used for Bitcoin Mining. There are many softwares out there, but two of the most famous are CGminer and BFGminer.
Step 3. Join a Bitcoin Mining Pool
The Bitcoin mining pools are large groups of the Bitcoin miners working together to solve a block and then you can share up the rewards. It’s a better option to share the work and split up the reward, as there are chances of earning more bitcoins.
- BitMinter
- CK Pool
- Eligius
- Slush Pool
These mining pools have fully validating blocks with Bitcoin Core 0.9.5
Step 4. Storing Bitcoins
After you mine, you need to store the bitcoins electronically. Here comes the question of security, as several exchanges worth millions have been hacked in the past. There have been bitcoin thefts due to the insecure handling of the private encryption key, so storing the mined coins is of utmost importance.
Step 5. Set Up A Wallet
You can store your Bitcoins in a Bitcoin wallet. Bitcoins are sent to you with a unique address that only belongs to the user and a Bitcoin wallet will provide security from all potential threats. You can set up your own Wallet by downloading a software client on your computer.
- SpectroCoin
- Kraken
- Localbitcoins
- Coinbase
These wallets offer premium security at nominal rates.
Step 6. Keep Yourself Updated With Bitcoin News
Only mining bitcoins won’t give profits. Keep yourself updated with daily Bitcoin news. WeUseCoins is a good source, as they have regular updates on Bitcoins.Scope and Legality of Bitcoins in IndiaIn India, Bitcoin is in the grey area. Currently the country has no law which says that investing or mining or earning Bitcoins is a criminal offence, however, it also does not have a legal status. Several developed nations around the world are pushing towards legalising Bitcoins, and hopefully, in future, India will too.Hopefully, this article has given you an overview of how Bitcoins are traded and mined. If you have any questions, do drop us a comment and we will make sure we answer your questions!
Question & Answers
Q: Reasons? Isnt legality a big hindrance. Also power of currency in supply getting challenged?
A: Just my opinion, I feel that there is a demand for anonymous decentralized transactions and it is going to grow in the future. Any legal alternative will defeat the purpose and thus, with developers integrating new technologies it seems Bitcoin will keep soaring.
Q: Any idea about mining bitcoin yourself?
A: Yep, anyone can do it; need a high upfront cost to achieve profitability, again with a high risk factor due to volatility
Q: Is the process automated?
A: Mostly yes, needs specialized graphic cards though and domain knowledge
Q: I agree that the transaction is not traceable hence, the illegal transactions (or hawala) :p would be fairly simpler.