The emergence of crypto currencies has turned the monetary system on its head. The introduction of crypto currencies such as Bitcoin,
Ethereum and lite coin has changed the way see and use money.
Every bitcoin user in the world is connected and form a network and process all bitcoin transactions in a public ledger called the block chain.
Some people have been capitalizing on this by creating large crypto currency mining facilities and virtual mining for cryptocurrency gold. But what is a Bit coin miner and how do they work?
Bitcoins are generated using the complex process called mining where a computer system is giving a complex mathematic problem to solve and the end result is a sixty-four-digit number.
When the computer successfully solves the equation a block is has been mined. The system adjusts the difficult
to mine bitcoin as a form automatic self-regulations. The reason it is called mining is because there are only twenty-one million bitcoins in the system to mined.
Unlike physical currency where the federal reserve can keep printing money and often lower its value. So hence the term mining as you are virtually excavating the bitcoin out of the system by using computers to solve a complex algorithm.
Bitcoin miners soon discovered that graphics cards, ordinarily used for playing video games were better equipped and faster at solving these complex algorithms although they do use more electricity and generate a lot more heat.
To give you an idea of the time and cost on mining bitcoin on large scale. 3000 bitcoin mining units can mine 20-25 and use in excess of eighty thousand dollars’ worth of electricity each. It would take a standard PC or mac approximately 435 years to mine one bitcoin.
If you start your great great great great grandchildren might have a one by the year 2452.
Each mining machine is connected to a power source and then to the internet. AS the mining of bitcoin gets exponentially
more difficult as more coins are mined from the system, the mining of bit coin has turned in arms race with the miner with the most processing power wins.
Companies have taken this into consideration and developed dedicated bit coin mining machines to cater to a growing industry. Bitcoin will probably never in our lifetime replace the current financial system but is definitely a financial model that disposes of the need for federal banks and is automatically regulated buy its users. A model that is worth considering now and in for years to come.