Bitcoins are an open source peer-to-peer payment method and digital currency introduced in 2009 by pseudonymous developer “Satoshi Nakamoto”. Bitcoin has been called a crypto currency because it uses cryptography to secure funds transfer. It’s founder has still not been confirmed yet, this is because if you just run a google search with the name “Satoshi Nakamoto” you won’t find a fixed photo of any one person, all website’s have varied views.
Bitcoins are simply represented by the symbol “BTC”. During transactions what actually happens is that:- Sender with bitcoins first stores them in a special bitcoin wallet’s (usually the web services to store bitcoins). Before sending the bitcoins are encrypted using a special type of encryption key and then broadcasted (passed on) as digital signals to the decentralised computers interconnected all over the world (this makes the peer-to-peer system) which then validates the transaction using proof-of-work method which prevents the same bitcoins to used twice and at last transfer’s the coins to the receiver’s wallet.
How To Get Bitcoins
New Bitcoins are mined. The number of bitcoins present at the time you are reading this can be found using this . The protocol that bitcoins follows is:- The rate of new Bitcoin creation will be halved every four years until there are 21 million BTC. Now “bitcoins mining” has a slight different meaning, that is – Now It means to participate in the decentralized network of computers around the world as peer-to-peer service for transaction of bitcoins and also gain or mine new bitcoins. Alternate way of mining will be buying bitcoins, but due to increasing value of bitcoins against US Dollar they also costs a much (Current exchange rate).
For every block mined you get 25 bitcoins and multiply 25 with current exchange value is the money you have at your hand. Due to evolving nature of internet and security you need to keep the bitcoins in a bitcoins wallet.
Mining Bitcoins : The Process
The mining process means using your computer’s (CPU OR GPU) processing power to solve some difficult and complex problems (computer algorithms) to earn bitcoins. These algorithms require much more processing capacity than a normal CPU (that we use in our home/office) can handle. As a result of very high requirement of mining process people have made groups to share their CPU/GPU resources (processing power) to mine bitcoins. The groups are called pools.
So as per the present mining scenario solo mining (mining yourself alone) will take many days to mine a single block like 3 years or more. Take for instance , if you want to mine bitcoins by using you laptop you’ll probably take more than 4 year’s. It’s purely your choice to mine solo or join a pool. And yeah joining a pool also means competition in sharing the mined bitcoins. You can also use your GPU (graphics card) to mine bitcoins.
How To Mine Bitcoins And How To Store Them
What you need is a client and a wallet to get started. Here are the options available for bitcoins mining.
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- You can use a bitcoin mining client on your system and get started solo.
- You can join a pool of other miner’s
- Trade/Purchase them
- Use hosted mining contracts
Here is a guide to get started with bitcoins mining process.
Mining POOLS : All here
Choose your wallet here.
Custom made hardware only for bitcoins mining are being offered by Butterfly labs.