The Complete Guide To Bitcoin And How To Get It
⏩What is Bitcoin?
Bitcoin was the first of what have become known as "cryptocurencies".
These are forms of digital money that use encryption to secure transactions and control the creation of new units.
The plan was to make a form of currency not controlled by governments or businesses, that you could trade globally with no cost and without having to reveal your identity.
The popularity of Bitcoin has spawned many copycats - sometimes called "altcoins".
To make things more confusing, there are also "second generation" virtual currencies like Ethereum and Bitcoin Cash.
So they’re not like the coins in my purse or wallet?
No. They are essentially a line of numbered “code” - instructions used in computer programming.
However, once purchased they can be exchanged for some goods and services, like normal money.
⏩The Advantages Of Bitcoin:No Central Command
Bitcoin isn’t owned by anyone. Think of it like email. Anyone can use it, but there isn’t a single company that is in charge of it. Bitcoin transactions are irreversible. This means that no one, including banks, or governments can block you from sending or receiving bitcoins with anyone else, anywhere in the world. With this freedom comes the great responsibility of not having any central authority to complain to if something goes wrong. Just like physical cash, don’t let strangers hold your bitcoins for you, and don’t send them to untrustworthy people on the internet.
Secure Your Wallet
There are several different types of Bitcoin wallets, but the most important distinction is in relation to who is in control of the private keys required to spend the bitcoins. Some Bitcoin “wallets” actually act more like banks because they are holding the user’s private keys on behalf. If you choose to use one of these services, be aware that you are completely at their mercy regarding the security of your bitcoins. Most wallets, however, allow the user to be in charge of their own private keys. This means that no one in the entire world can access your account without your permission. It also means that no one can help you if you forget your password or otherwise lose access to your private keys. If you decide you want to own a lot of Bitcoin it would be a good idea to divide them among several different wallets. As the saying goes, don’t put all your eggs in one basket.
Bitcoin Price
Like everything, Bitcoin’s price is determined by the laws of supply and demand. Because the supply is limited to 21 million bitcoins, as more people use Bitcoin the increased demand, combined with the fixed supply, will force the price to go up. Because the number of people using Bitcoin in the world is still relatively small, the price of Bitcoin in terms of traditional currency can fluctuate significantly on a daily basis, but will continue to increase as more people start to use it. For example, in early 2011 one Bitcoin was worth less than one USD, but in 2015 one Bitcoin is worth hundreds of USD. In the future, if Bitcoin becomes truly popular, each single Bitcoin will have to be worth at least hundreds of thousands of dollars in order to accommodate this additional demand.
Bitcoin Exchanges
There are several ways to buy Bitcoin, but trusted exchanges are a great way to acquire Bitcoin. Because there are inefficiencies in the traditional banking system, exchanges will sometimes have slightly different prices. If the difference is too great, traders will buy low on one an exchange and sell high on another and close the gap. If an exchange constantly has substantially different prices than others, it is a sign of trouble and that exchange should be avoided. As with everything else, do your research and find an exchange you can trust. It’s also a good idea not to use an exchange as a wallet. Move your Bitcoin to your personal wallet so that you have control over your funds at all times.
Bitcoin Isn't Completely Anonymous
Because all Bitcoin transactions are stored on a public ledger known as the blockchain, people might be able to link your identity to a transaction over time. Some companies offer various tools such as Bitcoin mixers to help achieve greater privacy, but it takes a huge amount of effort to use Bitcoin anonymously. You may want to follow your country’s tax regulations regarding Bitcoin in order to avoid trouble with the law, but you have the power not to should you choose to take that risk. To improve privacy, most newer Bitcoin wallets will use a new Bitcoin address each time someone sends bitcoins to you.
Unconfirmed Transactions
Bitcoin transactions are seen by the entire network within a few seconds and are usually recorded into Bitcoin's world wide ledger called the blockchain, in the next block. While it’s possible that a transaction won’t be confirmed in the next block, in the vast majority of circumstances it is fine to accept a transaction as soon as it has been seen by the network. Unlike traditional payment systems, Bitcoin transactions are lightning fast and can be sent globally. Bitcoin is still relatively new, but with each passing day the technology becomes more reliable. It is more and more unlikely that a major bug will emerge in the system as time goes by, and people can trust the technology more with the passing of time. Each month people transact hundreds of millions of dollars worth of Bitcoin.
But How Can I Get Bitcoins?
There are two ways of getting bitcoin: you can get bitcoins by buying them or through a way called Bitcoin mining
How Bitcoin Mining Works
Where do bitcoins come from? With paper money, a government decides when to print and distribute money. Bitcoin doesn't have a central government.
With Bitcoin, miners use special software to solve math problems and are issued a certain number of bitcoins in exchange. This provides a smart way to issue the currency and also creates an incentive for more people to mine.
What is the Blockchain?
Bitcoin mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual blocks must contain a proof of work to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the hashcash proof-of-work function.
The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus. Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a "subsidy" of newly created coins.
This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.
Bitcoin mining is so called because it resembles the mining of other commodities: it requires exertion and it slowly makes new currency available at a rate that resembles the rate at which commodities like gold are mined from the ground.
What is Bitcoin Mining Difficulty?
The Computationally-Difficult Problem
Bitcoin mining a block is difficult because the SHA-256 hash of a block's header must be lower than or equal to the target in order for the block to be accepted by the network.
This problem can be simplified for explanation purposes: The hash of a block must start with a certain number of zeros. The probability of calculating a hash that starts with many zeros is very low, therefore many attempts must be made. In order to generate a new hash each round, a nonce is incremented. See Proof of work for more information.
The Bitcoin Network Difficulty Metric
The Bitcoin mining network difficulty is the measure of how difficult it is to find a new block compared to the easiest it can ever be. It is recalculated every 2016 blocks to a value such that the previous 2016 blocks would have been generated in exactly two weeks had everyone been mining at this difficulty. This will yield, on average, one block every ten minutes.
As more miners join, the rate of block creation will go up. As the rate of block generation goes up, the difficulty rises to compensate which will push the rate of block creation back down. Any blocks released by malicious miners that do not meet the required difficulty target will simply be rejected by everyone on the network and thus will be worthless.
The Block Reward
When a block is discovered, the discoverer may award themselves a certain number of bitcoins, which is agreed-upon by everyone in the network. Currently this bounty is 25 bitcoins; this value will halve every 210,000 blocks. See Controlled Currency Supply.
Additionally, the miner is awarded the fees paid by users sending transactions. The fee is an incentive for the miner to include the transaction in their block. In the future, as the number of new bitcoins miners are allowed to create in each block dwindles, the fees will make up a much more important percentage of mining income.
And This Is A List Of The Best Mining Hardware
Miner | Capacity | Efficiency | Price |
---|---|---|---|
AntMiner S1 | 180 Gh/s | 2.0 W/Gh | $299.0 |
AntMiner S2 | 1000 Gh/s | 1.1 W/Gh | $2259.0 |
AntMiner S3 | 441 Gh/s | 0.77 W/Gh | $382.0 |
AntMiner S4 | 2000 Gh/s | 0.7 W/Gh | $1400.0 |
AntMiner S5 | 1155 Gh/s | 0.51 W/Gh | $370.0 |
AntMiner S5+ | 7722 Gh/s | 0.44 W/Gh | $2307.0 |
AntMiner S7 | 4.73 Th/s | 0.25 W/Gh | $479.95 |
AntMiner S9 | 13.5 Th/s | 0.098 W/Gh | $1,987.95 |
AntMiner U1 | 2 Gh/s | 1.25 W/Gh | $29.0 |
AntMiner U2 | 2 Gh/s | 1.0 W/Gh | $49.66 |
AntMiner U3 | 63 Gh/s | 1.0 W/Gh | $38.0 |
ASICMiner BE Blade | 11 Gh/s | 7.72 W/Gh | $350.0 |
ASICMiner BE Cube | 30 Gh/s | 6.67 W/Gh | $550.0 |
ASICMiner BE Sapphire | 0 Gh/s | 7.59 W/Gh | $20.0 |
ASICMiner BE Tube | 800 Gh/s | 1.13 W/Gh | $320.0 |
ASICMiner BE Prisma | 1400 Gh/s | 0.79 W/Gh | $600.0 |
Avalon Batch 1 | 66 Gh/s | 9.35 W/Gh | $1299.0 |
Avalon Batch 2 | 82 Gh/s | 8.54 W/Gh | $1499.0 |
Avalon Batch 3 | 82 Gh/s | 8.54 W/Gh | $1499.0 |
Avalon2 | 300 Gh/s | N/A | $3075.0 |
Avalon3 | 800 Gh/s | N/A | N/A |
Avalon6 | 3.5 Th/s | 0.29 W/Gh | $499.95 |
bi*fury | 5 Gh/s | 0.85 W/Gh | $209.0 |
BFL SC 5Gh/s | 5 Gh/s | 6.0 W/Gh | $274.0 |
BFL SC 10 Gh/s | 10 Gh/s | N/A | $50.0 |
BFL SC 25 Gh/s | 25 Gh/s | 6.0 W/Gh | $1249.0 |
BFL Little Single | 30 Gh/s | N/A | $649.0 |
BFL SC 50 Gh/s | 50 Gh/s | 6.0 W/Gh | $984.0 |
BFL Single 'SC' | 60 Gh/s | 4.0 W/Gh | $1299.0 |
BFL 230 GH/s Rack Mount | 230 Gh/s | N/A | $399 (used) |
BFL 500 GH/s Mini Rig SC | 500 Gh/s | 5.4 W/Gh | $22484.0 |
BFL Monarch 700GH/s | 700 Gh/s | 0.7 W/Gh | $1379.0 |
BitFury S.B. | N/A | N/A | N/A |
Bitmine.ch Avalon Clone 85GH | 85 Gh/s | 7.65 W/Gh | $6489.0 |
Black Arrow Prospero X-1 | 100 Gh/s | 1.0 W/Gh | $370.0 |
Black Arrow Prospero X-3 | 2000 Gh/s | 1.0 W/Gh | $6000.0 |
Blue Fury | 3 Gh/s | 1.0 W/Gh | $140.0 |
BTC Garden AM-V1 310 GH/s | 310 Gh/s | 1.05 W/Gh | $309.0 |
BTC Garden AM-V1 616 GH/s | 616 Gh/s | 1.05 W/Gh | $350.0 |
CoinTerra TerraMiner IV | 1600 Gh/s | 1.31 W/Gh | $1500.0 |
Drillbit | N/A | N/A | N/A |
HashBuster Micro | 20 Gh/s | 1.15 W/Gh | $688.0 |
HashBuster Nano | N/A | N/A | N/A |
HashCoins Apollo v3 | 1100 Gh/s | 0.91 W/Gh | $599.0 |
HashCoins Zeus v3 | 4500 Gh/s | 0.67 W/Gh | $2299.0 |
HashFast Baby Jet | 400 Gh/s | 1.1 W/Gh | $5600.0 |
HashFast Sierra | 1200 Gh/s | 1.1 W/Gh | $7080.0 |
HashFast Sierra Evo 3 | 2000 Gh/s | 1.1 W/Gh | $6800.0 |
Klondike | 5 Gh/s | 6.15 W/Gh | $20.0 |
KnCMiner Mercury | 100 Gh/s | 2.5 W/Gh | $1995.0 |
KnC Saturn | 250 Gh/s | 1.2 W/Gh | $2995.0 |
KnC Jupiter | 500 Gh/s | 1.2 W/Gh | $4995.0 |
KnC Neptune | 3000 Gh/s | 0.7 W/Gh | $12995.0 |
LittleFury | N/A | N/A | N/A |
Metabank | 120 Gh/s | 1.42 W/Gh | $2160.0 |
NanoFury / IceFury | 2 Gh/s | 1.25 W/Gh | N/A |
NanoFury NF2 | 4 Gh/s | 1.35 W/Gh | $50.0 |
BPMC Red Fury USB | 2.5 Gh/s | 0.96 W/Gh | $44.99 |
ROCKMINER R3-BOX | 450 Gh/s | 1.0 W/Gh | $200.0 |
ROCKMINER R4-BOX | 470 Gh/s | 1.0 W/Gh | $210.0 |
ROCKMINER Rocket BOX | 450 Gh/s | 1.07 W/Gh | $599.0 |
ROCKMINER R-BOX | 32 Gh/s | 1.41 W/Gh | $65.0 |
ROCKMINER R-BOX 110G | 110 Gh/s | 1.09 W/Gh | $88.0 |
ROCKMINER T1 800G | 800 Gh/s | 1.25 W/Gh | $325.0 |
Spondooliestech SP10 Dawson | 1400 Gh/s | 0.89 W/Gh | $2845.0 |
SP20 Jackson | 1.3-1.7 Th/s | 0.65 W/Gh | $248.99 |
Spondooliestech SP30 Yukon | 4500 Gh/s | 0.67 W/Gh | $4121.0 |
Spondooliestech SP31 Yukon | 4900 Gh/s | 0.61 W/Gh | $2075.0 |
Spondooliestech SP35 Yukon | 5500 Gh/s | 0.66 W/Gh | $2235.0 |
TerraHash Klondike 16 | 5 Gh/s | 7.11 W/Gh | $250.0 |
TerraHash Klondike 64 | 18 Gh/s | 7.06 W/Gh | $900.0 |
TerraHash DX Mini (full) | 90 Gh/s | 7.11 W/Gh | $6000.0 |
TerraHash DX Large (full) | 180 Gh/s | 7.11 W/Gh | $10500.0 |
Twinfury | 5 Gh/s | 0.85 W/Gh | $216.0 |
Avalon USB Nano3 | 3.6 Gh/s | 0.85 W/Gh | $55.0 |
GekkoScience | 9.5 Gh/s | 0.33 W/Gh | $49.97 |
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