Bitcoin is the buzzword on everyone’s lips recently. This is particularly true for investors who hope to profit off of Bitcoin investments, just as they profit off of shorting a stock. But, since Bitcoin is an entirely new type of currency, called cryptocurrency, most investors do not really know enough about it to have any real, reliable shot at earning big returns. Bitcoin mining strategies are one of the best ways for investors to earn profits in this volatile digital currency market. Learn everything you need to know about Bitcoin mining and how it is done below.
What Is It?
Bitcoin mining is the process of solving math problems in order to earn Bitcoins as payment. This is said to help incentivize people to mine Bitcoin. This is necessary for the cryptocurrency’s existence. National currencies are controlled by the government. This means that the government makes the call regarding money printing and distribution. Obviously, this is not possible for Bitcoin, which is not controlled by a central government. Bitcoin mining rewards miners for completing math equations and helps keep the digital currency viable.
What Tools Do You Need?
Bitcoin miners use specific bitcoin mining software to solve the math problems necessary to earn some of the currency. In addition to the software, miners will also need Bitcoin mining hardware if they want to have any chance at acquiring substantial amounts of Bitcoins. Bitcoin mining previously only required a high speed video processor card. Today, Bitcoin mining groups have compiled their processing power. That has made it nearly impossible for one average person to earn enough Bitcoin to break even on their own. So, if you want to know how to start mining Bitcoin, you first need to get all the best Bitcoin mining hardware and software.
Do You Need To Be A Tech Genius?
Thanks to boxed Bitcoin mining solutions, you no longer need to be a tech wiz or a math genius to mine Bitcoins. But, it certainly helps. In order to get started mining digital currency, you need to have a working knowledge of standard Bitcoin mining practices. It will also be incredibly difficult to compete against those tech geniuses, and billionaires like George Soros, that are mining Bitcoin as a business model. While tech-ability may not be required to learn how to mine Bitcoin, it will definitely help increase your odds at turning a profit.
Are There Problems?
Recently, Bitcoin mining has hit some turbulent waters. Researchers are currently looking at other mining strategies that may work better than the existing proof of work mining. These new strategies in development are called resource efficient mining and proof of stake mining. The new research is being conducted to respond to the energy consumption Bitcoin mining problem. Bitcoin mining requires an enormous amount of energy. In fact, the Bitcoin P2P network will use as much power as the entire United States by 2019. Clearly, there are some issues with Bitcoin mining. However, experts do hope to come up with solutions to these issues soon.
Mining vs. Buying
Bitcoin mining is not for everyone. For potential Bitcoin investors like you, it is probably better to simply buy Bitcoin, just like you would buy Infosys stock or similar. The resources it takes to earn Bitcoin mining profits offer less value to casual cryptocurrency investors. Learning how to buy Bitcoin outright is simpler and requires far less time, computing power and initial investment. If you want to start investing in Bitcoin, you probably should look to buy Bitcoin instead of mining it.
Investors everywhere are chomping at the bit to get a piece of the Bitcoin pie. However, Bitcoin mining is not for everyone. Investing in Bitcoin is very risky, but it could prove to pay off in the long run. If you are a first time Bitcoin investor, Bitcoin mining is probably not the best way to earn Bitcoin. Instead, consider buying Bitcoins online to invest in cryptocurrency. This way, you have far less at stake in these high-risk digital currency investments.
Photo from https://yourstory.com/2017/11/bitcoin-mining-energy-crisis/