Bitcoin is wildly confusing. And here’s the bad news: the fact you’re reading this now means you’re late to the game, and it’s going to be tough to turn a profit in Bitcoin mining. Nevertheless, if you want to try your hand at mining bitcoins, here we present the beginner's guide to generating bitcoins.
Following a dodgy patch in 2016, Bitcoin's value has recovered and actually surpassed the value of gold. Right now it's at £7,389.44, but yesterday hit an all time high of £8470.60(according to Coinbase).
But despite this Bitcoin is said to be under threat from several newer crypto-currencies, including Ethereum.
If you're finding yourself baffled as to what we're talking about, please let us explain.
What is Bitcoin?
Bitcoin is a digital currency that operates independently of a central bank. Encryption is used to regulate both the generation of Bitcoin units and the transfer of the currency.
What is Bitcoin worth?
In essence, the more bitcoins mined or ‘found’, the harder it is to ‘find’ more coins. While once it may have been possible to use a high-powered PC at home to mine Bitcoin on its own, the sheer popularity of mining Bitcoin means it’s viable only to join a pool. This is where your computer works alongside others to mine bitcoins. It’s much like [email protected], where clusters of computers work together to try and find extra-terrestrial life. See also: The rise of Bitcoin and why you can't mine them on your own.
Without getting bogged down with the technicalities, the groups of computers in a Bitcoin pool are crunching numbers to mine a block. For every block mined, you get 25 coins.
On 30 November 2017 one Bitcoin is worth £7,389.44.
It's crazy to think some analysts thought in 2015 that Bitcoin was doomed. Prices looked were around £150.
Google's currency converter lets you check very quickly how much a Bitcoin is worth.
Can you get rich with Bitcoin?
As we mentioned in the introduction, these days it's difficult to turn a profit mining Bitcoin. But it has been known, especially for early adopters of the virtual currency.
For example, the Guardian reports on how a Norwegian man’s $27 investment in Bitcoin turned into a $886,000 windfall four years later.
"Kristoffer Koch invested 150 kroner ($26.60) in 5,000 bitcoins in 2009, after discovering them during the course of writing a thesis on encryption. He promptly forgot about them until widespread media coverage of the anonymous, decentralised, peer-to-peer digital currency in April 2013 jogged his memory," reports the Guardian. At which point, they were worth a small fortune at $886,000.