Everything to Know About Bitcoin Mining
The number 1 reason why people are fond of using Bitcoin is that this cryptocurrency provides them with a chance to make a lot of money. There have been numerous cases where Bitcoin managed to turn average people into overnight millionaires.
The profit is what drove around 5 million users to its network. Many celebrities such as 50 Cent, Logic, Paris Hilton, Floyd Mayweather, and Gwyneth Paltrow are also part of the network as they are aware of the massive potential that Bitcoin has.
Bitcoin’s cornerstone is mining, one of the most important processes that keep this currency moving and allows it to conquer the world. We wanted to take a minute to dive into this process and explain everything you need to know about it.
What is Mining?
Thanks to mining, Bitcoin’s network has been able to survive throughout the years. Mining is a part of the blockchain, the technology that powers Bitcoin. Here’s how it works. Miners are people that complete the aforementioned process. What they do is, solve various complex puzzles. In doing so, they verify Bitcoin transactions that are later recorded into the blockchain. Each recorded transaction means that they successfully added another block to the blockchain. Just to clarify, the blockchain is the log that stores all Bitcoin transactions.
Of course, rewards follow for those that dive into this process. While mining may seem simple, it is far from it, which is why a reward is the only suitable option. Miners receive Bitcoins for every transaction that they verify.
These Bitcoins are later used to make a profit. How? By registering at trading sites. Bitcoin Storm is one of the most reputable sites as it relies on cutting edge technology to make sure that the registered traders maximize their profits when selling Bitcoins.
This site has been targeted by numerous conspiracy theorists who claim that the bitcoin champion is real, as is Bitcoin. These people believe that the whole network is a farce and that it doesn’t exist, which is of course, not true. Bitcoin is real and the possibility to make money with it is real, as well.
Mining During Halving Events
Mining gets difficult during halving events. Why? Because during these periods, the circulation of Bitcoins is cut drastically. These events are created so that the flow of Bitcoins in the network is controlled and are there to make sure that the market is steadily growing.
Since mining becomes much harder during these times, Bitcoin’s price always goes up. There have been a total of three mining events in Bitcoin’s history so far and all of them led to price surges approximately one year or a year and a half after they ended.
The first halving event was in mid-2012 and Bitcoin spiked a year and a half later (January 2014). The second halving event was in mid-2016, and Bitcoin spiked in December 2017 – exactly one and a half year later.
As for the third halving event, it took place in May 2020. Even though Bitcoin has managed to shatter the 2017 record in value and crossed $50,000 in value, experts believe that Bitcoin will keep rising and peak around summer or fall this year.
The Cost of Mining
Many people wonder why would you want to mine Bitcoin if it is extremely hard? Why don’t you just buy it at a certain price and re-sell it when it rises? The problem with that option is that buying and re-selling Bitcoin has a huge risk factor as Bitcoin’s value is subject to daily changes and a profit cannot be guaranteed.
On the other hand, mining is hard, but it is completely free. So, every dollar that you make by selling Bitcoins is pure profit.