What is Bitcoin, and how you can mine it at your home in Dubai (but shouldn’t)

Bitcoin, as you may know, has been in the headlines for quite some time now, thanks to its meteoric rise. As we write, it’s actually down 20 per cent at $13,482 on Luxembourg-based Bitstamp after rocketing 40 per cent in the 48 hours before that. And it actually flirted with $20,000, touching a ridiculous $19,500 on the US-based GDAX.

Bitcoin’s roller-coaster ride is making a real roller-coaster look like your garden-variety merry-go-round. And it’s so divisive; Japan recognises it as legal tender. JPMorgan Chase CEO Jamie Dimon says it’s a ‘fraud’. And investus maximus Warren Buffett dismisses it as a ‘mirage’.

But for all its ups and downs, many are still mesmerised by the thought of investing in Bitcoin – in cryptocurrencies, generally speaking – because of the mouth-watering and tempting value it gives. It was worth $997 on January 1 this year, with a 2017 low at $752 in mid-January – so with that peak figure above, it’s up an eye-popping 2,493 per cent.

If you’re ready to give in to the temptation (or to those clickbait ads), we’ve prepared a little guide for you, in the hope you’d better understand what in the world this craze is all about. And we’ll try to make it as simple as possible.

What exactly is Bitcoin?

As we said, it’s a type of cryptocurrency that can be used for payments, one that aims – and actually can – replace cash, cards, online payments and every other payment method you already know. It’s a decentralised currency, meaning it has no central bank nor someone or group controlling it.

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How does it work?

As they are not real money, you can consider them as credits – ‘tokens’, as it is widely called by its users – which you can exchange for goods and services. Think of it as an in-game purchase in a video game using the currencies in it, to a certain extent.

Is it secure and reliable?

That’s what Bitcoin touts so much because it uses blockchain technology (quite sure you’ve heard of that). Simply put, when you pay using Bitcoins, it’s sent via an encrypted way, guaranteeing it won’t be hacked.

Who are we to blame for all this madness?

Someone who goes by the alias ‘Satoshi Nakamoto’, who apparently felt that the world needed a new type of currency and released Bitcoin in January 2009. Nakamoto’s real identity has yet to be deduced until now; the closest was Australian Craig Steven Wright, but there’s no hard evidence that he’s Nakamoto. (Trivia: The ‘Satoshi’ is the smallest unit of Bitcoin, equivalent to one hundred millionths of one Bitcoin – 0.00000001 BTC; one BTC is then equal to 100,000,000 satoshis.)

Eh? So Bitcoin has units too?

Yep, using the all-too-familiar metric system. To save my breath, just check the table below from BITSUSD:

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You can also use their online converter to find out how much Bitcoin currently is.

Is it true that there’s only a limited number of Bitcoins?

Yes (unfortunately?). Nakamoto made sure of that when he created that finite number of Bitcoins – a total of 21 million. In early January 2014, nine million have been mined. Last we checked, about 16.73 million have been discovered – almost 80 per cent of the total – meaning there are only five million left for us to scramble for.

Wait, ‘mined’?

You read that right. To gain Bitcoins, you need to mine them, akin to how we obtain gold and other precious metals and minerals – but digitally. To start off, originally, for every block successfully mined, 50 Bitcoins were rewarded. But here’s the interesting thing: the reward gets halved after every 210,000 blocks, or about every four years. At present, the reward is 12.5, as we’re in the third ‘reward era’.

Now, take all those 21 million Bitcoins and do the math; it is widely accepted that the last Bitcoin will be mined somewhere near October 8… 2140 – or about 123 years from now. And this is by design; Nakamoto created Bitcoin with the intent of giving miners a harder time to discover them as more of it are mined. Clever.

Read more: http://bit.ly/2iJtUIM
Source Credit: Khaleej Times

 

 

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