what is bitcoin mining
Want to know where the actual Bitcoins are coming from? Learn who’s mining, where are the bitcoins are coming from, what is bitcoin mining and why bitcoin mine.
What is bitcoin mining?
The Bitcoin (BTC) is a virtual currency, created by a slow computer process called mining. Yes, I said mining, like the coal miners from back in the day. In our traditional monetary system, the government prints money when they need to, but in Bitcoin and Cryptocurrency, money is discovered. Anyone with a computer can become a miner, and discover bitcoins.
Take a minute to imagine yourself as a coal miner digging away. You are using all your power and might to hash at the coal to discover these diamonds. You are excited because, once you get the diamonds you can buy things with it, you can trade it, or you can keep it. This is the same concept as bitcoin and cryptocurrency. Your computer is the “Miner” and the Bitcoins / Cryptocurrency are the diamonds it is looking for. Now imagine you are in a coal mine with 50 other miners. You guys are all looking for diamonds. In bitcoin, computers around the word are mining for coins by competing with each other. Every time someone successfully creates a hash, they get a rewards in bitcoins, this big record book called the blockchain is updated to keep track of payments and everybody at the coal mine hears about it. You want to keep mining because you get paid to mine.
Many people are constantly asking me, but where does the actual money come from? Like how can I spend these virtual bitcoins that I mined. How much is it worth? Where are the coins stored at, when can I trade them in for real cash, and who else is using bitcoin? These are all great questions. I’m going to run through them real quick.
The answers to your questions:
Who is mining bitcoin?
- people are are looking to learn something new
- people looking to gain coins to trade for physical cash
- people looking to try this new digital currency and spend it
- people looking to get rich
- people looking for extra passive income
- people looking to sell the bitcoins they mine for a profit
Where are the bitcoins are coming from?
- people are using computers to mine for them – (at home)
- people are paying a service to cloud mine for them – (remote)
- people are buying them from online exchanges (online)
- people are trading them to and from other coins (online)
- people are getting paid in bitcoins from sales or doing work for them (in real life or online)
- people are gambling and winning them (online)
- people are sending them to their friends and family
Why mine for bitcoin / Why use bitcoin?
So I get this question a lot. When we have regular money, why are you telling me I should mine for bitcoin? Whats the purpose of this? This is explained in a few easy bullet points:
- No Government Control or country controls bitcoin or cryptocurrency ( you can setup, use, access it without any prerequisites)
- You own it – Accounts cannot be frozen for any reason or put on payment holds like the traditional bank
- Inflation Control – More bitcoins cannot just be printed
- No Fees to send the bitcoin money ( think western union or international funds transfer at your bank)
- Fast – Instant money transfers across the globe (takes only a few minutes for computers to verify funds transfers)
- Easy to carry – $1Billion worth of bitcoin can fit on a USB stick or one small paper wallet.
- Anonymous Accounts are encrypted so your personal info not tied to transactions
- Trade for Real Cash – You can download the money and get physical cash at Bitcoin ATMS
- Profit off of it – if you keep it and the price goes up you can sell it later and keep the profit
- Alternative Income – Accept other forms of payment when your customer doesn’t have cash to spend
- Low Fees – Bitcoin Payment Processor fees are ridiculously low compared to Major Credit Card companies, Banks and Paypal
- No chargebacks ever – Bitcoin transactions are irreversible, so you don’t need to worry about chargebacks.
- Fraud Prevention – People using bitcoin get a level of identity theft protection that credit cards cannot offer.
- No hold-ups on your money – Accepting bitcoin payments gets you cash faster than it does when you accept credit card payments.
- Be the cool kid on the block – Many people will shop with you and tell there friends just BECA– USE you accept bitcoin.
I hoped this helped you get an understanding of what is bitcoin mining and why use bitcoin. If you need more information, I would be happy to help answer any questions you have. Please tune into Coin Cutie TV on youtube or the best news and product reviews on bitcoin and cryptocurrency.
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