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Bitcoins Mining Truths

This currency is being utilized by more and more websites and organizations.  As we mentioned earlier, Namecheap, the well-known domain name registrar, just recently started taking Bitcoins as payment.  

Other companies are starting to adopt it as well.  For bitcoins to be usable, one has to first mine them via a computer engaging in a mathematical process to add them to the public ledger that keeps track of all bitcoins on the Bitcoin network.  You’ll learn more about this process below.

Bitcoin mining involves a software program known as a “bitcoin miner.”  This program is downloaded onto any device that can connect to the Internet, such as a desktop computer, laptop computer, Smartphone, or tablet.  

However, the process is resource-intensive, and even high-end computers with graphical processing units (GPUs) have only a very limited ability to mine Bitcoins.  You really need a Field Programmatic Gate Array (FPGA) or an Application Specific Integrated Circuit (ASIC) to really be able to mine bitcoins on your own.  If you have either of those, you are in much better shape to mine bitcoins on your own.

The bitcoin miners communicate over the Bitcoin network and verify all legitimate transactions by adding them to a central log, known as the “block chain,” that is updated periodically across the entire Bitcoin network.  Think public ledger!

The block chain helps to ensure that the total number of bitcoins in circulation at any one time is always known and recorded.  The idea behind this is to attempt to keep the value of the Bitcoin currency as stable as possible. When the log is updated, more bitcoins are added to the network as well.

A block chain is a group of transactions which begins with the very first Bitcoin transaction and stops with the latest one. This helps to protect the integrity of Bitcoins and ensures that no fraud or deceptions can take place.

As mentioned above, bitcoin mining is resource-intensive. This was designed on purpose to ensure that bitcoins cannot be produced more frequently than what was designed to occur.  

This is because there will only be 21 million bitcoins by the time mining ends in 2140.  The mining process also has to become more resource-intensive as time goes on because already over 50% of the 21 million planned bitcoins have already been mined.  

Thus, it will take even longer to mine the remaining bitcoins in the future.  Each time a block is mined, an electronic signature is attached and is verified by other bitcoin miners on the network to ensure that those bitcoins are legitimate and can be added to the total number of bitcoins available on the network.

This mining process was established so that no one could control all of the Bitcoin currency, nor could the currency be produced right away.  This is in an effort to keep the currency’s valuation relatively stable, since there is no physical form in the world and no centralized agency behind the currency.

In addition, by having many bitcoin miners exerting a great deal of computational power to manifest the bitcoins, the miners cannot attack the network itself to where people can take advantage of the Bitcoin network.

Bitcoin is the first digital currency on the Internet, and there have been ramifications both in the digital world and the physical world.  In the digital world, more websites and companies are starting to accept it for payment, while other digital currencies are being formed and circulated.  

In the physical world, the financial industry and governments around the world are talking more about it and wondering whether to recognize it as a legitimate currency, and if so, how.  

Many banks are against digital currencies because they fear the repercussions digital currencies could have on their businesses, businesses that have been stable and dominant for over 100 years.  It will be interesting to see how Bitcoin is seen over time as more and more companies, agencies, and individuals use the currency frequently for purchases, transactions, and payments.

Bitcoin Mining can be expensive and is not recommended for everyone. As well as needing the appropriate software, running it can really add up on your hydro bill.

If you would like to become a Miner your best bet is to join a group of Miners. Everyone works together and then shares the profits.