As the new financial order looms, cryptocurrency sits center stage. The rise of bitcoin has been meteoric, and its sourcing has been an interesting yet enigmatic topic for many of those interested in finance and investing.
Bitcoins are created through mining. This process may seem complicated to some, so here’s an explanation. Bitcoin transactions are made on a blockchain. As the name implies, this is simply akin to a chain of blocks, where the latest block is joined onto the on etch that came before it. When someone sends a transaction for a Bitcoin (or share of a Bitcoin), it gets packed onto the next available block on the chain. These blocks are produced, on average, every 1- minute, and they are created by Bitcoin miners.
The miners achieve the creation of a new Bitcoin by solving a complex mathematical puzzle. This challenge is to create a suitable combination of digits and letters by repeatedly applying the same formula to a range of inputs. Below, we will run through some of the pros and cons of mining Bitcoin if you are an Australian resident, where it is legal to do so.
One major pro of mining Bitcoin is the potential reward that you can achieve if you are successful in your endeavors. If a miner correctly solves the complex number combination (hash), then they will be rewarded with an amount of Bitcoin. This amount is currently set at about 6.25 Bitcoins per Bitcoin mined. This can be a great incentive for many, as Bitcoins are worth considerable amounts of fiat currency in the current times. For those who have the time and patience, mining can be a fruitful financial endeavor.
Another positive to mining Bitcoin is that it is secure. Due to the time, effort, and complexity of the process, it makes the network extremely secure and difficult to ‘cheat’, as such. Put simply, there’s no way of finding the winning hash without first engaging in the actual process of hashing. This is a pro for the wider industry, which can take solace from the fact that they are involved in a secure industry.
A con of mining Bitcoin is that it can often not be very profitable. The costs involved in mining come from a range of different angles, and this can sometimes outweigh the money coming in for most miners. For example, it costs a significant amount of money through electricity to power the mining. To make it profitable, miners would need to setup a serious and efficient mining operation that was low-cost and cheap.
If you are looking to buy bitcoin in Australia or wondering how you can bitcoin Perth, there are a range of ways you can do it. The first way is through a classic exchange, and the second is through mining it yourself. With the pointers above, it is clear that these two options will have different pros and cons depending on the person.
Commentaires