What is Bitcoin, and how to mine it at your huis te Dubai
If you’ve seen this ad below somewhere on the Web – or anything similar to it, both ter the factors of message it wants to bring across and annoyance – congratulations, you’re te the real world.
Hmm. I live near Umm Suqeim but all’s peaceful and quiet overheen there.
Now, on to the unreal stuff.
Bitcoin, spil you may know, has bot ter the headlines for fairly some time now, thanks to its meteoric rise. Spil wij write, it’s actually down 20 vanaf cent at $13,482 on Luxembourg-based Bitstamp after rocketing 40 vanaf cent ter the 48 hours before that.
And it actually flirted with $20,000, touching a ridiculous $Nineteen,500 on the US-based GDAX.
Bitcoin’s roller-coaster rail is making a real roller-coaster look like your garden-variety merry-go-round. And it’s so divisive, Japan recognises it spil legal tender. JPMorgan Pursue CEO Jamie Dimon says it’s a ‘fraud’. And investus maximus Warren Buffett dismisses it spil a ‘mirage’.
But for all its ups and downs, many are still mesmerised by the thought of investing te Bitcoin – te cryptocurrencies, generally speaking – because of the mouth-watering and tempting value it gives. It wasgoed worth $997 on January 1 this year, with a 2018 low at $752 ter mid-January – so with that peak figure above, it’s up an eye-popping Two,493 vanaf cent.
If you’re ready to give te to the temptation (or to those clickbait ads), wij’ve ready a little guide for you, ter the hope you’d better understand what te the world this craze is all about. And wij’ll attempt to make it spil elementary spil possible.
Spil wij said, it’s a type of cryptocurrency that can be used for payments, one that aims – and actually can – substitute specie, cards, online payments and every other payment method you already know. It’s a decentralised currency, meaning it has no central handelsbank strafgevangenis someone or group controlling it.
Spil they are not real money, you can consider them spil credits – ‘tokens’, spil it is widely called by its users – which you can exchange for goods and services. Think of it spil an in-game purchase ter a movie spel using the currencies ter it, to a certain extent.
Is it secure and reliable?
That’s what Bitcoin touts so much because it uses blockchain technology (fairly sure you’ve heard of that). Simply waterput, when you pay using Bitcoins, it’s sent via an encrypted way, assuring it won’t be hacked.
Who are wij to blame for all this madness?
Someone who goes by the zogeheten ‘Satoshi Nakamoto’, who evidently felt that the world needed a fresh type of currency and released Bitcoin te January 2009. Nakamoto’s real identity has yet to be deduced until now, the closest wasgoed Australian Craig Steven Wright, but there’s no hard evidence that he’s Nakamoto. (Trivia: The ‘Satoshi’ is the smallest unit of Bitcoin, omschrijving to one hundred millionths of one Bitcoin – 0.00000001 BTC, one BTC is then equal to 100,000,000 satoshis.)
Eh? So Bitcoin has units too?
Yep, using the all-too-familiar metric system. To save my breath, just check the table below from BITSUSD:
You can also use their online converter to find out how much Bitcoin presently is.
Is it true that there’s only a limited number of Bitcoins?
Yes (unluckily?). Nakamoto made sure of that when he created that finite number of Bitcoins – a total of 21 million. Ter early January 2014, nine million have bot mined. Last wij checked, about 16.73 million have bot discovered – almost 80 vanaf cent of the total – meaning there are only five million left for us to scramble for.
You read that right. To build up Bitcoins, you need to mine them, akin to how wij obtain gold and other precious metals and minerals – but digitally.
Okay, okay. To commence off, originally, for every block successfully mined, 50 Bitcoins were rewarded. But here’s the interesting thing: the prize gets halved after every 210,000 blocks, or about every four years. At present, the prize is 12.Five, spil wij’re te the third ‘prize era’.
Now, take all those 21 million Bitcoins and do the math, it is widely accepted that the last Bitcoin will be mined somewhere near October 8. 2140 – or about 123 years from now.
And this is by vormgeving, Nakamoto created Bitcoin with the intent of providing miners a firmer time to detect them spil more of it are mined. Clever.
Fine. So how does mining exactly work?
Here’s the delicious part. While with gold you can make do with some good ol’ handy contraptions, mining for Bitcoin is a totally different league.
But to waterput it ter layman’s terms, you need a pc, a specialised, mining-specific software (readily available on the Web) and a entire lotta patience.
When Bitcoin mining commenced, even cheap PCs were good enough to get you your very first prizes. But spil more are discovered, you need to rev up your machine to keep up with the complexities of mining it. Ter 2014, a PC capable of locating Bitcoins on its own cost around $12,000, but, evidently, today it’s getting a bit ‘affordable’ (thanks, competition). (Here’s one that popped up ter Google ads, apaprently available for us here te the Middle East.) Ter other words, swifter machines are being made today to cope up with the enlargening difficulty of mining.
Thus, the birth of ASIC – application-specific integrated circuit – which wasgoed designed specifically for Bitcoin.
Anyway, once you’ve got those ter place, here comes the fork ter the road: do you want to (A) mine on your own, or (B) get some help doing so?
If you choose B, then this is the more highly-recommended one. You can join groups or pools that share the same aim spil you do. The more you are, the more computing power you’ll have – but, of course, you’ll be sharing whatever Bitcoins you dig up.
Which brings us back to option A: the danger here is that mining is so ingewikkeld that you might dig up for months – years even – and still come up empty-handed.
Again, yes. Bitcoins are mined – using the specialised software and hardware – by solving complicated mathematical puzzles.
The puzzles are determined by transactions being sent at that time and the solution to the previous puzzle – meaning the solution to the present puzzle is different from those before it. If you want to switch an earlier transaction, you’ll have to solve each before it – which makes the entire thing fool-proof. Good luck with that.
This is also the way miners verify that a Bitcoin used is the real thing.
Which explains why it could take some time to process a payment for ice juices using Bitcoin.
You left behind to explain what blockchain is.
Oops, sorry. Blockchain wasgoed also the brainchild of Nakamoto, and he/she (or they, it’s speculated that it may also be a group) created it to ensure that Bitcoins are safe to use. Basically, it’s a continuously growing list of records, called blocks, which are linked (thus, the name) and protected using the secure method of cryptography (wasgoed the Morse code the prototype of this?).
To paraphrase what wij’ve mentioned earlier – and to waterput it te the simplest way possible – the cryptography used to keep it secure permits each transaction to be tied to the previous records. Furthermore, thesis transactions are distributed among members of a blockchain distributed ledger, meaning everyone can view it, assuring transparency.
To dual down on that point earlier, if you attempt to mess around with gegevens on the ledger, you’d have to switch every other record that has bot there before it. Again, good luck with that.
Okay, assuming I do mine some Bitcoins, where do I store it?
Like your metselspecie and cards, you stow them away ter a digital wallet, which, te turn, you can use to transact. A lotsbestemming of services suggest this. The danger with digital wallets for cryptocurrencies is that it can be hacked.
This is, evidently, a major flaw of digital money.
I heard some major exchanges will be suggesting Bitcoin futures.
Yes, but given the roller-coaster rail and wild volatility of Bitcoin, a lotsbestemming of questions remain if this will be actually a good investment.
Can you lend mij money so I can invest ter Bitcoin?
Fine. I’m not a geeky/nerdy enough to mine, how can I still obtain Bitcoins?
You can either buy them on exchanges, receive them spil payment or track down an ATM that converts your contant into Bitcoin and vice-versa.
What if I paid with Bitcoins by mistake? Can I switch sides the transaction?
Unluckily, no. Once you’ve sent them out, even a divinely-powered Control-Z won’t take your act back. Oops.
There’s a debate actually going on about Bitcoin’s irreversible process: depending on where you’re from, it’s either good because it’s that secure, or plain bad because of evident reasons.
Are there any alternatives to Bitcoin?
Of course, a lotsbestemming of digital currencies have spawned. Just google it.
Yes, there are apps that’ll help you with that, but it doesn’t compare to the power of a full-fledged, Bitcoin-hunting PC.
Is Bitcoin legal te the UAE?
Good question. While there are a lotsbestemming of clickbait ads on the Web telling stuff ter the lines of ‘Emiratis making money with Bitcoin, blah, blah, blah. ‘, the Central Bankgebouw of the UAE has said it has not issued any licence related to cryptocurrencies, spil wij reported ter October. Governor Mubarak Rashed Reeds Mansouri warned against engaging with digital currencies, citing the ‘high risks’ involved. The Dubai Financial Services Authority also warned against cryptocurrencies ter September.
Te brief, if you want to mine for Bitcoins ter the UAE, you’re on your own.
Bitcoin – and the surplus of the cryptocurrency world – may still be ter its infancy. But with the way it’s going, it won’t be surprising if a lotsbestemming will be more interested thanks to its tempting value (could it lead to a ‘Miners’ War’ of sorts?).
It offers potential, but at the same time a lotsbestemming of questions are still there – but wij’re sure to get answers, even if it’s leisurely but surely.
I just wish I’d still be here when the final Bitcoin is unearthed, er, ‘uncyberspaced’.