What is Bitcoin? How does it work? Who are Miners? All these concepts bring the word bitcoin to your mind.
Bitcoin was Launched in 2009 but its concept was presented in 2008. The concept was to launch such a decentralised body of system that will not involve any third party and will be pier-to-pier. Currencies like Fiat, Dollars, Rupees or any other government related resource always have banks involved for any transactional activity. Unlike bitcoin where, buyer and seller will have a direct interaction without having a central body.
Bitcoin did not receive acceptance in the early stage as it was thought to be a scam or fraud for its no- tracking policy.
All the cryptocurrencies follow blockchain technology but have different algorithms. Bitcoin also works on blockchain technology and operates on the algorithm “Proof of Work”. In which Miners helps in performing the transaction.
Miners are the people participating in the blockchain process and their purpose is to help complete the transaction from one computer to another through a network of computing gear and software. For this miners get a mining reward for validating the transaction.
As discussed earlier bitcoin was thought to be a fraud scheme, but with gradual acceptance, people started using it and named it digital Gold as it helps to gain good profit.
Fiat currency is also a digital currency but it has its roots in banks. Cryptocurrency on the other hand is also digital but without any regulations. The Apps used to access the currency shows money in digits and are Blockchain at its backend that involves nodes, proof of work, proof of stake etc.
How to set up a mining System?
Miners are required to complete the validation of the transactions. So in order to become a miner there are no such special requirements for computers or heavy setups, you can simply make your own budget by calculating electricity consumption cost, system cost, profit to be gained. The Hashrate is then calculated and whatever cost lies in that budget, you can install a mining setup within that cost.
What makes bitcoin so Powerful?
Bitcoin is the biggest form of cryptocurrency. It’s the one being the most adopted. Bitcoin solves all the problems that were with centralised sources of money. You don’t have to just rely on one central bank’s ledger to keep track of money which none of us can see, whereas every computer that participates in the system keeps a copy of the ledger which is impossible to take down from a system because of thousands of copies. So it’s safer and transparent as everyone can see it . It is protected against inflation as with bitcoin there’s only 21 million total coins in the system so unlike money you can’t print more and devalue it.
Is Bitcoin actually a smart investment?
With Bitcoin there is a chance that you lose everything if you don’t have enough knowledge and are not aware of the risks.but as for the conclusion, If bitcoin keeps on growing as the market cap of gold,which experts think it could, one could expect a x30 return on the investment.