A short and simple explaination about how bitcoin mining works When you hear about bitcoin “mining,” you envisage coins being dug out of the ground. But bitcoin isn’t physical, so why do we call it mining? Because it’s similar to gold mining in that the bitcoins exist in the protocol’s design (just as the gold exists underground), but they haven’t been brought out into the light yet (just as the gold hasn’t yet been dug up). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point. What “miners” do is bring them out into the light, a few at a time. They get to do this as a reward for creating blocks of validated transactions and including them in the blockchain. Nodes Backtracking a bit, let’s talk about “nodes.” A node is a powerful computer that runs the bitcoin software and helps to keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin software (free) and leave a certain port open (the drawback is that it consumes energy and storage space – the network at time of writing takes up about 145GB). Nodes spread bitcoin transactions around the network. One node will send information to a few nodes that it knows, who will relay the information to nodes that they know, etc. That way it ends up getting around the whole network pretty quickly. Some nodes are mining nodes (usually referred to as “miners”). These group outstanding transactions into blocks and add them to the blockchain. How do they do this? By solving a complex mathematical puzzle that is part of the bitcoin program, and including the answer in the block. The puzzle that needs solving is to find a number that, when combined with the data in the block and passed through a hash function, produces a result that is within a certain range. This is much harder than it sounds. (For trivia lovers, this number is called a “nonce”, which is a concatenation of “number used once.” In the case of bitcoin, the nonce is an integer between 0 and 4,294,967,296.) Solving the puzzle How do they find this number? By guessing at random. The hash function makes it impossible to predict what the output will be. So, miners guess the mystery number and apply the hash function to the combination of that guessed number and the data in the block. The resulting hash has to start with a pre-established number of zeroes. There’s no way of knowing which number will work, because two consecutive integers will give wildly varying results. What’s more, there may be several nonces that produce the desired result, or there may be none (in which case the miners keep trying, but with a different block configuration). The first miner to get a resulting hash within the desired range announces its victory to the rest of the network. All the other miners immediately stop work on that block and start trying to figure out the mystery number for the next one. As a reward for its work, the victorious miner gets some new bitcoin. Economics At the time of writing, the reward is 12.5 bitcoins, which at time of writing is worth almost $200,000. Although it’s not nearly as cushy a deal as it sounds. There are a lot of mining nodes competing for that reward, and it is a question of luck and computing power (the more guessing calculations you can perform, the luckier you are). Also, the costs of being a mining node are considerable, not only because of the powerful hardware needed (if you have a faster processor than your competitors, you have a better chance of finding the correct number before they do), but also because of the large amounts of electricity that running these processors consumes. And, the number of bitcoins awarded as a reward for solving the puzzle will decrease. It’s 12.5 now, but it halves every four years or so (the next one is expected in 2020-21). The value of bitcoin relative to cost of electricity and hardware could go up over the next few years to partially compensate this reduction, but it’s not certain. Difficulty The difficulty of the calculation (the required number of zeroes at the beginning of the hash string) is adjusted frequently, so that it takes on average about 10 minutes to process a block. Why 10 minutes? That is the amount of time that the bitcoin developers think is necessary for a steady and diminishing flow of new coins until the maximum number of 21 million is reached (expected some time in 2140). If you’ve made it this far, then congratulations! There is still so much more to explain about the system, but at least now you have an idea of the broad outline of the genius of the programming and the concept. For the first time we have a system that allows for convenient digital transfers in a decentralized, trust-free and tamper-proof way. The repercussions could be huge. But what is Cloudmining , and how is it profitable? ↓ If you want to find out , check out this amazing BlogPost ↓
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Bitcoin to cash- How to get my money
"How do i cash out my bitcoin?"
One of the most common questions that people start asking way too late . But how can i even turn that money back from electronic to hard cash ? There are many ways and it depends on a few different factors that you can pick. Do i want to sell fast or with more profit? Do i want it on my bank account or in cash? Might someone even pay with Paypal ? All of these things are possible so lets start with the easiest method:
Localbitcoins you to completely vary your factors however it pleases you.
Want a fast trade for Bank transfer? Look for a buyer and you got your cash within 3-7 days straight to your bank. Want to sell bitcoin fast and for hard cash in your hand ? Just 2 simple clicks away. Localbitcoin offers you to buy and sell bitcoin for Paypal , banktransfer , credit card or even in person for cash . A little bit like ebay , but with better customer protection. Just look at all those different payment options popular in the US. Over 60 Different Payment-options in total ! There is no better Options to turn your Coins into Cash ! Next up is our allways reliable Wallet - provider Blockchain.Info They finally got it implemented and you can now buy and sell Bitcoin and Ethereum straight from or to your wallet with a few simple clicks. They take decent fees but it is easier than any other method . The downside is that you loose 5-10% of your investment to them , which is still a pretty big junk , considering that you can up your investment by selling it on LocalBitcoins by an easy 10-15% , up to 30% extra if you feel risky and sell it for Paypal. So i wouldnt recommend Blockchain.info . But if you are just looking for a fast and easy method , this is the way to go. But how do you cash out your altcoins Now ? I recommend you to use this site and exchange it all for Bitcoin there , then sell it via Localbitcoins
Binance is my favorite exchange for 2 reasons.
There is nothing more outrageous than using an anonymous currency , just to verify your identity when cashing out or buying other currencies. So to answer How you cash out bitcoin easily
Now enjoy your new earned wealth , Dont forget to let some roll , Crypto is still going strong the next few years! All you need to know about investing in cryptocurrencySo you allready got yourself some Bitcoin or Ethereum and want to make even more profit by investing in Altcoins? If you allready own Bitcoin ,there is only one more thing to do . Sign up on an Exchange of your choice. Else check out this post on I will show you how to buy Altcoins like XRP or ETH on Binance. This is how it works on all exchanges ! The best Exchange is Binance , as it offers most of the Coins that are widely known and adds new coins on a daily basis. They will NOT ask you for ID ! The Support is really nice and motivated. Also you can trade up to 2 BTC a day without verification ! This way you can stay anonymous or at least safe from scammers as you dont need to give your personal information to anyone while you invest in cryptocurrency. I do recommend the 2FA sms verification for your coins safety , but it is not required to get yourself some of these amazing moneyprinters called altcoins. If you dont mind beeing verified with ID , check out POLONIEX How to get the Altcoins now you might ask In order to buy Altcoins you need to store the BTC you are going to exchange on Binance first. Just sign up here and log into your account. Then click on "Funds" and "Deposit" Then choose the desired Coin to deposit , in this case "BTC" and you will get an adress to send your funds to. Wait until its confirmed (depending on your transaction fee between 1 minute and 72 Hours) and you can go for a happy shopping spree . It's so simple , it can be shown in 1 single picture ↓ Congratulations ! You have now invested in altcoins. But please , for longterm hold , DO NOT STORE THEM ON THE EXCHANGE. I trust Binance with ~10.000$ on daytrading right now , but better be safe than sorry! You like another exchange more and want it featured ? Leave a comment
Bitcoin is a form of digital currency
It is created with the algorythm SHA-256. Bitcoins aren't printed like Dollar or Euro bills, they are produced by so called "mining".
What makes it different from normal currencies?
Bitcoin can be used to buy things electronically. You could call it the currency of the internet. However, bitcoinâs most important characteristic, and the thing that makes it different to conventional money, is that it is decentralized. No single institution controls the bitcoin network. Who created it? A software developer called Satoshi Nakamoto proposed bitcoin, which was an electronic payment system based on mathematical proof. The idea was to produce a currency independent of any central authority, transferable electronically, more or less instantly, with very low transaction fees. Who prints it? No one. This currency isnât physically printed in the shadows by a central bank, unaccountable to the population, and making its own rules. Those banks can simply produce more money to cover the national debt, thus devaluing their currency. Instead, bitcoin is created digitally, by a community of people that anyone can join. Bitcoins are âminedâ, using computing power in a distributed network. This network also processes transactions made with the virtual currency, effectively making bitcoin its own payment network. So you canât Produce unlimited bitcoins? Thatâs right. The bitcoin protocol â the rules that make bitcoin work â say that only 21 million bitcoins can ever be created by miners. However, these coins can be divided into smaller parts (the smallest divisible amount is one hundred millionth of a bitcoin and is called a âSatoshiâ, after the founder of bitcoin). What is bitcoin based on? Conventional currency has been based on gold or silver. Theoretically, you knew that if you handed over a dollar at the bank, you could get some gold back (although this didnât actually work in practice). But bitcoin isnât based on gold; itâs based on mathematics. Around the world, people are using software programs that follow a mathematical formula to produce bitcoins. The mathematical formula is freely available, so that anyone can check it. The software is also open source, meaning that anyone can look at it to make sure that it does what it is supposed to. So how does Bitcoin work? âTo answer this , we got the perfect video hereâ If you have any additional questions , feel free to leave a comment and we will update the post . Help us to help you. Cloudmining is a way to mine Bitcoins or other Cryptocurrencies without the need of using your own hardware. But how does it work ? Companies buy large amounts of professional mininghardware like Bitmains Antminer S9 for Bitcoinmining , host it somewhere with cheap electricity and run the miners for you . No hastle with hardware or software , you just lend the miningpower and they take care of electricity costs , malfunctions , replacements . But is it profitable ? Yes it is ! If you dont run into a scam . The 2 most trusted sites that have been operating for years now are HashFlare and Eobot They are both the best in what they do . Hashflare has amazing Bitcoin mining contracts. 1TH/s miningpower costs 220$ but you can allready start with 10GH/s for 2.20$ ! Right now it will return about 4-5 times the amount you invest but with the Bitcoin price rising again it will sure go back to 8x your investment or more. And on the other side , EObot. EObot is amazing for Altcoin mining like Ethereum , Litecoin , Monero , XRP , Doge , Golem , Maid and more. The mining for Bitcoin on there is not profitable but if you play it smart you mine Coins like Gridcoin or Golem now as they are ~1$ but will sure soon rise as they are great projects. If you had started to mine XRP 1 year ago like i did , you would understand . I mined ~1000 XRP for 20$ and now 1 XRP is worth ~3 $ ! Thats how you make big gains with EObot. And you can start with Faucetmoney ! EObot is an Exchange aswell and offers you to exchange your coins from faucet , how little it may be , to be exchanged for Miningpower (GHS4.0). So you can turn Faucet money into a solid miningoperation. You can even mine with your own Hardware in their pool and get it credited on their site. Below you can see what 1 year of faucets and smart use of EObot can accomplish In Conclusion:
Cloudmining can be very profitable , just dont fall for scam . Stay to the big ones and dont blindly invest "Doublers" .They do not work! The easy way to Cryptomining
***Update on the Guide***
Some Antivirus block Minergate as its a Cryptominer that due to how easy it is to use ,Minergate was abused by hackers that took over other peoples computers to mine with them. If your Antivirus flags it after the Download , allow it or else it wont work! There is no Virus in the MinerGate software , it's a false positive , check out this post about it with more information ↓↓
If you are new to the game and dont want to read tons about mining before you start i would say ↓this one↓
as its made for pretty much all GPUs and doesnt have to be configured
all you need is a wallet to receive payments and you are set to mine over 15+ different Coins , including Bitcoin/Monero/Bytecoin/… The tricky way to Cryptomining
You can also mine optimized but that will require a lot of knowledge on software and hardware that you are going to use .
At first you need to look for a coin to mine , right now i would recommend XMR as its most profitable and can be mined with GPU aswell as CPU. Then you need a software for this , in case of XMR , this site will give you everything you need , from software to pool : XMR-Miner After choosing your desired miningsoftware you will have to get a pool . Choose one from the list found here : Pool-List Now configure your software to work with the pool to choose , enter your wallet aswell and you are good to go ! I cant post a more indepth guide here as it varies way too much with all the different GPU's , Pools and coins , aswell as softwares. Thats why a beginner should choose the easy method , presented on top ; ) Another easy method would be Cloudmining. Just rent some Hardware that is allready set up and running and just take the miningprofits ! good luck on your journey ! For more information on bitcoins check out this Beginner Guide on Bitcoin or get Free Coins like BTC/ETH/LTC/XRP and more here -> Free Coins
What is a Bitcoin Wallet?
This guide will show you how to create and set up your first Bitcoin wallet (an “account”). But first: A “wallet” is basically the Bitcoin equivalent of a bank account. It allows you to receive bitcoins, store them, and then send them to others. There are two main types of wallets. A hot wallet is one that you install on your own computer or mobile device. You are in complete control over the security of your coins, but since they are on a device that is connected to the internet they are less secure. The second type of wallet is a hardware wallet. They maintain high levels of security to protect your coins by storing your coins offline. Offline storage keeps your coins and ata out of reach from hackers. Get an easy to use Online Wallet here :
Click on sign up and get a wallet with a few simple clicks.
Crucial here is that you write down your private key AND NEVER GIVE IT TO ANYONE ! Also note all your passphrases to secure your bitcoin wallet . DO NOT SAVE YOUR CREDENTIALS ON YOUR COMPUTER ! Print them and store them safely as if it were the money you are about to make or store on there. You might aswell check out QoinPro
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