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?”
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.
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.
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.
Did you know you can quickly and easily buy AND sell Bitcoin and 35 other digital currencies at any Coin Cloud machine? With over 1,300 machines nationwide, there’s one near you. Find your closest Coin Cloud Bitcoin ATM here
Disclaimer: The information and views supplied on the Coin Cloud blog are for educational and entertainment purposes only. We are not financial advisors, so please do your research and consult with a trusted financial specialist before investing your money.
Founded in 2014 in Las Vegas, Nevada, Coin Cloud is the leading digital currency machine (DCM) operator. With over 4,500 locations nationwide, in 48 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 over 40 cryptocurrency options with cash.
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