Bitcoin has been in the news a lot lately. Bitcoin is a decentralised virtual currency that uses peer-to-peer technology to operate with no central authority or banks; Bitcoin has gained notoriety recently for its use on the Silk Road Marketplace, an underground website where users could purchase drugs among other illicit goods using Bitcoin as their mode of payment. You can also visit our official site for gaining information about bitcoin trading.
Today Bitcoin mining is done by specially designed Bitcoin mining hardware. These devices are made specifically to calculate SHA-256 hashes in order to solve Bitcoin blocks which are only found every 10 minutes on average.
Bitcoin transactions are verified 24 hours a day meaning that whenever bitcoins are exchanged hands there is probably someone trying to mine new coins. At the current rate of 25 Bitcoins per block, this means around 6 million dollars are being spent on Bitcoin mining.
However, Bitcoin mining these days is likely not profitable with Bitcoin’s current value where during the peak of Bitcoin in 2011 when Bitcoin reached 30 dollars each it might have been possible for Bitcoin miners to make a profit,
but today Bitcoin is trading around 180 dollars which has made Bitcoin mining almost obsolete.
In 2009, Bitcoin was launched by a pseudonymous developer “Satoshi Nakamoto”. Bitcoin has been referred to as a “peer-to-peer version of electronic cash” and allows for instant payments to anyone, anywhere in the world. Bitcoin is completely decentralised and free from government oversight, but this doesn’t mean that Bitcoin mining is profitable.
Bitcoin’s Profitability
Bitcoin’s profitability all depends on how much you’re willing to invest into Bitcoin mining hardware and software/hosting services. To get started with Bitcoin mining, one must first acquire Bitcoin mining hardware and install specific software/hosting services that allow access to your newly acquired Bitcoin mining hardware. After doing so, you can begin submitting proof-of-work problems to gain Bitcoins. Once Bitcoin mining hardware has been obtained, it is important to join a Bitcoin mining pool because Bitcoin mining solo will not yield very much Bitcoin.
It’s also important to note that Bitcoin mining software/hardware is constantly being developed and should be upgraded on occasion. Bitcoin Mining profitability can vary based on Bitcoin exchange rates, the network difficulty level, Bitcoin halving events which occur every 4 years where the number of Bitcoins awarded for solving a block is cut in half (currently 12.5 BTC but will decrease over time), the cost of running your Bitcoin miners including electricity costs, cooling costs, etc., you can view detailed statistics on Bitcoin network by using websites like blockchain.info.The future of Bitcoin mining seems bleak at this point in time without major changes. Bitcoin mining is vital to keep Bitcoin’s decentralised public ledger, the Blockchain, secure.
Conclusion
Bitcoin was introduced in early 2009 by the anonymous Satoshi Nakamoto. Bitcoin has since become more popular and profitable as prices rise, investors accumulate Bitcoin (called holding main), and companies like Bit continue to innovate blockchain technology with semiconductor chips that are more efficient than GPUs for Bitcoin mining.
Newer cryptocurrencies have also come into existence since Bitcoin was created, such as Ethereum and ZCash, which use different hashing algorithms than Bitcoin does. These new coins can be mined using graphics processing units (GPUs) instead of CPUs or ASICs. This makes older machines obsolete for mining the newer currencies because they cannot compete against GPUs’ hash power.
As Bitcoin mining becomes less profitable and Bitcoin prices continue to decline, it seems Bitcoin mining is not as profitable as it once was.
Bitcoin Mining Becomes Less Profitable As Bitcoin Prices Decline And Bitcoin Mining Hardware Becomes Obsolete For Some Coins Like Ethereum And ZCash That Use Different Algorithms Than Bitcoin’s SHA-256.
If Bitcoin mining is no longer profitable for some people, are they out of luck?
I think this question has already been addressed in the article so I’d prefer not to repeat what’s there word for word. Someone who understands Bitcoin would understand that if Bitcoin mining isn’t profitable for someone, they’re most likely not out of luck because Bitcoin mining itself was never supposed to be profitable in the first place. Bitcoin mining is merely a process by which Bitcoin blocks are added to Blockchain and thus Bitcoin transactions become verified and secured. The incentive for Bitcoin miners (the people who “mine” Bitcoin) has always been Bitcoin transaction fees from users who send Bitcoin transactions via their Bitcoin mining hardware. Bitcoin miners are only incentivized to mine Bitcoin through Bitcoin transaction fees which ensures Bitcoin’s decentralised nature because it takes away the need for Bitcoin miners to depend on Bitcoin block rewards in order for Bitcoin mining to turn a profit.
