Bitcoin Mining is a form of Digital Currency which is created and held electronically only.The main thing about Bitcoin is, it doesn’t get printed unlike the dollars or pounds. Bitcoins are not produced by Large Banks nor by Government officials,they are produced by People Worldwide using a software on the computers that solves maths problems. The computer referred here is not a normal computer that you and me are having, they are high specs computers and are very costly and for the maintenance also we need a lot of money.
Base Principle of Bitcoin
Bitcoin is based on solving an encryption formula which requires extreme amount of computing power.
You have theoretically read about the normal currency in your studies in the school. It says that if you handed some money to the bank then you can get the gold back.However practically it is not possible. But Bitcoin is something really different. Bitcoins are produced on the base of a Mathematical Formula which has a different solution every time you solve it.
Everywhere around the world, People are using software to solve the problems of Mathematics and produce the Bitcoins. The mathematical formula is freely available to you on the Internet.
Points to know –
1-Each time you solve a portion of formula you earn a Bitcoin.
2- Only 21 million Bitcoins will ever exist.
3- Nearly all the Bitcoins have been mined and are circulated.
Where Bitcoin gets print?
Bitcoin doesn’t get print anywhere.it gets produced. As told earlier that Bitcoins are produced for solving a part of a Mathematics problem.
So there is no Government official who prints these Bitcoins.
Bitcoins can be produced by you also. Only you need the Mathematics Formula and the most important thing, High Computing Power.
Who Created the Bitcoin?
A Software Developer named as Satoshi Nakamoto firstly brought the concept of Bitcoins which was a system of electronic payment and based on mathematical proof. The main idea of Satoshi Nakamoto was to make a currency which should be independent of any central authority and later he got success in his idea.
Why should we use Bitcoin?
We know that you will be thinking that why we should use the Bitcoins as we have money. Bitcoin is a thing which is not known Worldwide but it will soon hit the main market.
We will provide you the valid reasons to use the Bitcoins.
1) Transaction is Fast- Bitcoin can be transferred at a very fast rate. If you pay a cheque from another bank into your bank then the bank will hold the money for few days to make sure the funds are really available. So there’s a lots of time waste. That’s why Bitcoins are used.
2) Central authority can’t take away- Sometimes in some countries it had happened that Central authority wanted to take back uninsured deposits larger than $100,000 to help recapitalize itself, causing huge unrest in the local population. So Bitcoins will never be taken away from you.
3) Transaction fee is minimal- Sometimes if you want to do a transaction Internationally then your Bank may charge some fee for International Transaction. But Bitcoin doesn’t.
4) It’s all Transparent- Bitcoins are all transparent. It stores every single transaction that had ever done and it is called Blockchain. It means if you have publicly used Bitcoins then everyone can tell how many Bitcoins are stored in that address but your identity will be not known.
5) Easy to set up- Have you ever opened a Bank account? If you did then you would know that how many forms are to be filled and how many questions are being asked but setting up a address of Bitcoin is very very easy. You can set up a address for Bitcoin in few seconds without any question and without any fee.
6) Bitcoin is Secure- Bitcoin miners help keep the Bitcoin network secure by approving transactions. Mining is an important and integral part of Bitcoin that ensures fairness while keeping the Bitcoin network stable, safe and secure.
We will be there to tell you more about Bitcoin in the next articles.
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