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Old 14-10-2017, 03:36 PM   #26
GO FURTHER
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Default Re: World's First - Purchased Lambo with Bitcoin

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Originally Posted by gossy View Post
Why are the prices skyrocketing, and why have Investors not bought up all the remaining Bitcoins if they are such a good deal?

I have just been introduced to Bitcoin from a colleague and I am more than skeptical at the moment.
You cannot buy up all the remaining Bitcoins, because they have not been released (mined) as yet.

The Bitcoins need to be "mined", which means people use very fast computers based on fast graphic cards built solely for the purpose by doing work on the Blockchain solving complex mathematical problems.... They are rewarded for their work in Bitcoins for finding a new block (Block reward).

This is the cryptographic work which miners perform in order to find the solution which allows them to define a new block in the chain.

The problem is that it costs a lot of electricity to mine a Bitcoin. To make it worthwhile, mining is best done with solar panels or overseas where electricity pricing is not as high as in Australia.

The rate at which coins can be mined gets less and less over the years till it reaches the 21,000,000 total coins that will ever be released in Bitcoins.

It will get harder to mine them in the years ahead because the computing power needed to mine them increases as the mathematical difficulty increases on the Blockchain.

In the very early days of Bitcoin, one could mine them with a normal desktop PC using fast CPU's alone... But now even the fastest Intel CPU's are too slow and an array of much faster dedicated graphic cards are used.

A state of the art Bitcoin miner PC (ASIC mining rig) costs about US$3,000 to buy.

The cost of running such a machine at say 30 cents a kilowatt hour in Australia would be about $3,100 a year!

So what miners are now doing is working as a "pool" or mining team with their dedicated mining computers a bit like the "SETI" program where users all over the world devote computer downtime to find evidence for extraterrestrial intelligence in the universe.

When Bitcoins are mined by the team with pooled computers, they then agree to share in the Bitcoins.

Think of it as ten people digging a hole in the ground with shovels instead of just one person... Much faster of course.

Last edited by GO FURTHER; 14-10-2017 at 03:41 PM.
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