August 2017

bitcoin

Bitcoin Mining – Alone or In A Team?

By Bitcoin Mining! This is the answer to the frequently asked question of how bitcoins are actually “produced” as a purely digital currency. And not a few would like to try to convert their own computer to the music press in order to be able to “print” legal money quite legally. In the case of mining, however, there are no tangible means of payment, but cryptographic tasks are solved. This results in so-called hashes, a 32-bit-long value, by which transactions within the Bitcoin network are made possible and which acts as a kind of key.

The computation of such a value takes a computer fully because a hash value is to be found that is below a certain value. This is also the difficulty of the task to be solved. This level of difficulty increases continuously with the number and quality of the miners, which means that the required computer performance is continually increased to finally calculate a complete block. Because only for this there is a reward of 50 Bitcoins. In addition, a normal processor, the CPU, is much less effective in Bitcoin mining than a graphics processor (GPU). And even with these, there are significant differences in the performance of Bitcoin mining in different manufacturers’ cards. Just with the right graphics card is worth the effort and/or costs and income in a favorable relationship to each other. Above all, owners of AMD cards have considerable advantages.

As an individual with a commercial computer, you have little chance of earning a bit at Bitcoin Mining. This is why more and more Bitcoin Miners are joining together to form so-called mining pools with their common computing power. As a result, the calculation of new blocks is considerably faster and the reward is distributed to the individual members, depending on the computer performance. The disadvantage of pool mining is the fees charged by the individual members. In addition, a pool can also fail completely, which is why users should pay attention to evasive pools. In contrast to solo mining, however, a continuous income arises here, which would otherwise have to wait several years in the worst case.

If you are not able to access any Bitcoin-oriented computer, the best is to use Poolmining. Solo mining is basically worth nothing at all.

bitcoin

Bitcoin – Value Stability Through Protection Against Inflation

Global banking crises and the payment problems of many countries are shattering the economy and lessen the confidence of private investors in the currencies of the states. Export and import goods are becoming ever more expensive and the state banks are putting more money into circulation to avert a possible bankruptcy. The resulting inflation depreciates the currency and makes prices more expensive. With Bitcoin, the developer under the pseudonym Satoshi Nakamoto has succeeded in developing a currency that is independent of banks and has a worldwide validity.

 

The decentralized generation of the bitcoin on the computer and its quantity limit to 21million bitcoins prevent inflation. The currency is generated worldwide at currently 6 blocks per hour. By solving complex computing tasks, 50 Bitcoins are output as a reward per block. To stabilize the electronic currency, the number of blocks per hour is maintained but the payout of the reward is regularly reduced. As a result, the growth of the money supply is effectively slowed down and stopped when the volume limit is reached.

The quantity limitation of the bitcoin is to be understood as a tool for stabilizing the currency. In contrast to the currencies of individual countries, the purchasing power of Bitcoin is not dependent on the overall economic situation. Bitcoin, therefore, does not deal with global or country-specific economic crises. As a result, inflation or deflation takes place only at a negligible level. Furthermore, by the mining, the generation of the blocks, the amount of money is regulated and kept stable.

Critics, however, fear a rapid increase in the value of Bitcoin. Speculators, in particular, could try to hoard the electronically generated money to wait for the right time for an optimal return. The resulting deflation has, however, an advantage for the users of the peer-to-peer network. The goods and services offered would be cheaper when the bitcoins are hoarded.