Bitcoin Mining

Sep 1st, 2017 – Comment

The bitcoin mining machines are the slaves.


About the Author

Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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Further Research

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Yesterday August 31, 2017 in what has been a first in radio I started to provide live Bitcoin quotes during my Happy Capitalism segments on Talk Radio AM640. That prompted listeners to want more information on the crypto currency. I asked my friend who actually has mined bitcoin to share her experience.  Here’s what she had to say.

Barb Paluszkiewcz

CDN Technologies | PH. 905 542 9759

202-2421 Bristol Circle, Oakville, ON L6H 5S9

 

Watch our video:  I.T. SCAMS – by CDN Technologies

 

 

 

 

 

My operation… well to make money. At the time bitcoins were running at about $800. By the time I bought and sold I think I netted $20.

 

Where to begin…

 

Mining bit coin is expensive, you really have to know your numbers, here’s why.

 

Electricity.

This is why all the Bit coin farms are in China.

Hardware.

The equipment to mine is expensive.

RealEstate.

You need room to house all the equipment.

 

So how it works, you need
bit coin wallet – free

Bitcoin miner – buy (physical/tangible machine) [Ebay]

Bitcoin mining pool –  (service) not free

Bitcoin Exchange – service not free

 

 

The Process

 

You sign up for a bitcoin wallet. You need to put your bitcoins someplace.

 

You buy a bitcoin miner – which is the latest and greatest mathematical computing  machine. This machine sucks electricity to operate. It also sucks electricity to cool. So as the machine ages its ability to produce bitcoin declines as every hour the complexity of bitcoin calculations increases, and the amount of bitcoin miners performing these calculations also increases.  So unless you electricity is stolen, or someone else is paying for it ( parents, landlord, etc) it expensive to run. Older machines cant perform as good as new ones, so every few months they need to be replaced for optimum performance.

 

Now that you have a bitcoin miner, you have to subscribe to a bitcoin mining pool. This service will tell you daily how your bitcoin machine is doing, and how many bitcoins you have. A bitcoin is not a tangible coin like a loonie or a toonie. It is a mathematical computation, and your bitcoin mining machine gets rewarded for doing the math calculations to keep track of and verify the bitcoin transactions and bitcoin wallet contents of the world, solving the mathematical solutions to the long encrypted keys required.  These bitcoin rewards are put daily you’re your bitcoin wallet.  Your “miner” is actually being compensating for helping to do the math that keeps bitcoins running.

 

Now that you have bitcoins in your bitcoin wallet, you can transfer your bitcoins to other bitcoin wallets. When you transfer bitcoins to other wallets you can trade for products/services.  For the most part historically it has been bad and illegal stuff, since bit coining is supposed to be untraceable.

 

A bitcoin exchange is a service where you can exchange/trade your bitcoins for currency like Dollars.

 

The Money Part

 

When you do the math, bitcoins cost a lot of money to mine – electricity and hardware being the biggest part. Everyone takes their cut along the way. Bitcoins can crash like tulips.

Currently there is a lot of hype around bitcoins because of cybercriminal activity and the ability to be anonymous and go hog wild stealing – and no body knows who you are.

 

 

Analogy – and this is bad, but it’s similar to the slave trade industry.

The bitcoin mining machines are the slaves.

 

 

Ask me your questions because there is a lot of information in my head that can get sucked out and your questions will help me sort it and put it in layman’s terms.

 

Categories: Bitcoin
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