Tuesday, January 17, 2017



The easiest way to describe the Bitcoin network is to think of it as a distributed ledger of account balances, denominated in Bitcoin.  We refer to a Bitcoin account as an “address,” which is a unique string of letters and numbers that references a specific account.  The ledger of accounts we mentioned includes not only a complete list of accounts (addresses), as well as their current balance, but every transaction that has occurred since day one.  We say it is distributed because it is stored on thousands of computers around the world, which provides redundancy against any single point of failure.  While one person, region or country could be disconnected from the network, Bitcoin is functional as long as there are 2 or more instances of the software running.

Transactions between addresses are stored incrementally, approximately every 10 minutes.  We call these incremental lists of transactions “blocks.”  Each block must reference the previous block before it, resulting in a chain of blocks known as the blockchain.  The blockchain is essentially the Bitcoin network’s database that stores a record of every transaction, dating all the way back to the original Genesis block.  Bitcoins ONLY exist in the blockchain, so clearly we need to verify that the blockchain is not only accurate, but secure against attack or fraud.  This is where mining comes in, which secures the transactions in the ledger.


Think of mining as a globally distributed security system for Bitcoin.  Mining is the process of encapsulating all of the most recent transactions into a new block of transactions, which must fulfill a number of specific rules.  First, in order cheap celebrex for a mined block to be considered permanent, it must refer to the previous block before it.  Second, it must include as many transactions to date as possible.  Third, it must fulfill a very complex mathematical equation.  The mathematical equation involves “hashing” long strings of letters and numbers using the SHA-256 algorithm to generate a very large number. Once this calculation is performed, and submitted to the network, this is considered a “hash”.  Most hardware routinely performs billions or trillions of these calculations per second.  The miner who provides the best solution to a given block, which satisfies all three requirements, receives a reward of 25 Bitcoins!  Bitcoin mining evolved from using personal computers that were able to process thousands of these calculations per second to Bitcoin-specific chips that can process billions of SHA-256 hashes per second.

An important point to mention is that production of Bitcoin is designed to decrease over time, which means the Bitcoin block reward will decrease by half every four years.  As of early 2015, approximately 13.5 million Bitcoins have been produced.  There is a limit of 21 million Bitcoins that will be produced before the year 2140, which means 64% of the world Bitcoin supply has already been created. 


Starting with its creation, Bitcoin is basically defined by the digitally signed records of its transactions. It is more of an encrypted proof of work that is created under a computer intensive process. Miners use a software that enables them to asses their processing capacity to solve transaction-related algorithms and are then awarded with a certain number of Bitcoin per block. This chain prevents an attempt by a miner to spend Bitcoin more than once which could as well cause the digital currency to be counterfeited simply through copy and paste.

Cloud mining (Bitcoin) used to be conducted on CPUs of individual computers with greater speed and more processing cores leading to more profits. Multi-graphics card systems then dominated the mining systems followed by field-programmable gate arrays (FPGAs) and finally application-specific integrated circuits (ASICs) so as to find more hashes with less electric power usage. It is this constant escalation that has made it difficult for prospective miners to venture into this field unless individuals work together in mining pools. The whole mechanism is specifically created to prevent inflation worldwide.

Bitcoin started with a few individuals and small mining organizations at a time when start-ups could be enabled by single high-end gaming system but now large mining organizations can spend thousands on just one specialized high-performance computer. In cloud mining (Bitcoin), if you were to buy your own mining hardware you would have to integrate it with your computer, install the mining software, join a mining pool and you are ready to go. You would have to let your mining software run day and night and install quality fans to cool your CPU. Of course you also have to pay for increased electricity costs and deal with additional problems if any. Generally, you have to be a little tech savvy to mine using you own equipment because it would take lot more effort on your part to make a Bitcoin.

Depending on the mining platform or company that you have registered under, a small amount may be deducted to cover the costs of maintenance and running the hardware each time you get a mining reward. Since the entire operation benefits from economies of scale, these costs are usually much smaller if you compare them with what you would be paying mining at home using your own software.

As long as you have purchased some hashing power the mining software works for you 24/7. It doesn’t matter what you are doing whether you are sleeping, working on something else or on vacation, the system will still be running. With a more advanced cloud mining power, you will still earn Bitcoin even if your computer is turned off for days.

If you want to invest in Bitcoin Mining without the hassle of managing your own hardware, 
there is an alternative. You can use the cloud to earn your coins.
Cloud mining means using shared processing power run from remote data centres. 
One only needs a home computer for communications, optional local bitcoin wallets and so on.
Here’s why you might want to consider cloud mining:
  • A quiet, cooler home – no constantly humming fans.
  • No added electricity costs.
  • No equipment to sell when mining ceases to be profitable.
  • No ventilation problems with hot equipment.
  • Reduced chance of being let down by mining equipment suppliers.

- No investment needed to start earn cash, Mining Bitcoin.
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- 4 Mining Center Worldwide (San Francisco, Nuremberg, Singapore and China).
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