What Everybody Dislikes About Crypto Mining And Why
Over the past few months I have watched bitcoin's value rise exponentially. I had no idea what bitcoin was and never even heard about crypto currency a few months ago. But with the recent government and media attention crypto currencies have received, they have gotten everyone's attention.
Crypto currency or more simply digital money is gaining acceptance quickly all over the world as it makes transactions quicker and cheaper. These transactions are secured by cryptography and each transaction has its own signature or private key. With its rise in value and popularity everybody wants a piece of the action. You can find two main ways to make money with bitcoin. The very first is a pretty simple method of purchasing the coin being an investment and hope that its value increases. Your second is the process of "mining" bitcoins. Once a transaction has occurred they are then verified over the network by "miners" using complicated algorithms. As a reward for their work they receive transaction fees and/or freshly minted bitcoins!
From an investing standpoint there is a big risk/reward factor as this currency will be new and it has no intrinsic value causing volatility and big price changes. A positive fact is the fact that there is a huge amount of cash invested in this and businesses are signing on to use this currency so we have no idea when its value will go back to zero!
"Mining" has a big risk/reward factor. In the beginning of bitcoin, you used to be able to "mine" with the ordinary lap-top or home computer. But now as more individuals are doing it the difficulty and power needed to "mine" increases. Bitcoins have a maximum amount that can be minted (21 million). And as we get closer and closer to 21 million the amount of bitcoin mining rewarded for each successful "mine" gets smaller and smaller. Now "miners" looking to be profitable have to invest in complicated high tech mining rigs and there is still no guarantee they are going to be profitable or perhaps make their costs back.
There's a third and safer option, however. In almost any sudden happening that promises riches the most lucrative venture is selling the tool that can help produce these riches. For example, in a gold rush it might be the shovel and in "mining" for bitcoin it might be mining rigs or powerful graphic cards. In the event you can produce these or even get your on the job some cheap you will make a substantial profit flipping them. Unfortunately, only a select few have the luxury of choosing this option.
With folks flocking towards the riches dangling in front of them the scam artists are having an area day also. Read articles, browse the forums, watch the bitcoin market, and research your costs and ROI before even considering investing anything. In my opinion, you should do this for several weeks before putting any money into play. This really is an incredibly volatile market and an even riskier investment.
