What is Bitcoin?
In the digital world we are used to copying everything. The unique thing about Bitcoin is that it can not be copied. It is impossible to copy a bitcoin that gives it away as a digital asset is actually given away. There is no copy that remains as we are used to with a PDF file or Word document. Each edition is unique and must be checked and maintained in a decentralized cash register, the blockchain! Who does this important work? Exactly, the Bitcoin miners.
What is a bitcoin miner?
Bitcoin mining is the process whereby the miners check whether bitcoins are not issued twice! As remuneration for the work, the miners get paid in bitcoins and receive the transaction costs.
Checking and recording the transactions in the Bitcoin cash book, the blockchain, not only ensures safety, but also the money creation process. Because all copies of the blockchain within the network are checked and secured, Bitcoins can be found.
This works on the basis of a proof of work algorithm, which requires the solving of very complicated calculations required to create blocks, process them and find bitcoins. When the calculation is solved, a new block will be released in which only a maximum of 25 bitcoins will be found. The new validated transaction block is added to the blockchain.
Keeping records and creating money are inextricably linked until all bitcoins are found. The idea is that 1 Bitcoin is so expensive that the miners earn enough money from the transaction costs and are not dependent on finding new bitcoins.
Why would 1 Bitcoin only become more expensive?
Bitcoin has a built-in scarcity, can not be printed or copied. This while the demand for bitcoins will increase over time due to the development of the Bitcoin network and economy. Bitcoin promotes deflation.
Bitcoin’s value as the money from the internet will only grow in importance. This is quite in contrast with the monetary policy and all the monetary creation programs of all Central Banks. Fiat money on the basis of debt encourages inflation. We can therefore expect a capital flight in, among others, Bitcoin. Huge demand, very low supply means greater market capitalization and a higher and more stable bitcoin price!
Can Bitcoin and the Bitcoin mining process not be hacked?
There are currently 300,000 bitcoin miners active around the world. Nowadays it takes a huge infrastructure to mine Bitcoins. If Google used all its servers and computing power to extract bitcoins, this power would only represent about 1% of the entire network. Bitcoin is actually properly anchored in a globally distributed hardware infrastructure of enormous proportions. More important is the fact that Bitcoin itself is based on the best encryption hash algorithm that exists: SHA2-256. This means that cracking a bitcoin address costs on average about 2 ^ 45 years (35,000 billion years). Bitcoin has never been cracked. It is super safe healthy digital cash!
Bitcoin mining is a specialization. Below in this video document you get a wonderful impression of how one of the largest Bitcoin mining plant (or server park) in Dalian China looks like. This Bitcoin mining operation has a monthly electricity bill of 80,000 USD!
Why should I buy bitcoins?
Nowadays you can extract many more coins than just Bitcoin. We are therefore talking about crypto mining in which we can specifically investigate which coin can be profitable for mining and can increase enormously in value in the future. Most PoW-coins use a different algorithm, especially Script is popular. PoW coins such as Litecoin, Dogecoin, Feathercoin and Viacoin are easier and of course cheaper to mine. For more information:
What is crypto mining?
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