A whole sector of bitcoin services has developed around this practice – for mining, specially adapted computers are used, in which the minimum energy consumption is taken care of with as much computing power as possible, provided by the GPU (using the CPU for calculations would be completely unprofitable). Users form groups, working together on “mining”.
Unfortunately, nowadays, it is not worth thinking about the vision of wealth gained in this way – the chance to get many bitcoins at a low cost existed at the very beginning of the currency’s existence. Its first users quickly mined millions of bitcoins (almost a third of all bitcoins were mined in three years, and 21 million are expected to be in circulation around 2033). Those who joined the system later had to supply more and more computing power, which translated into lower and lower revenues. The difficulty of extracting 1 BTC is several hundred thousand times greater than at the beginning of the system’s operation.
Trust is the basis of success.
Bitcoin might as well be a stick with notches or a cap made of a bottle of wheat beer – it has no value in itself, especially since it does not exist physically (although there have been attempts to give it a material form). Okay, but the same can be said about the dollar or almost any other currency, for example. So where is the problem?
Years ago, before the Bretton Woods system came into force; a US citizen could go to the bank with a bundle of banknotes and ask them to exchange a paper roll for the equivalent of a gold bar. These common-sense principles propagated, among others by the Austrian School of Economics, they were quickly destroyed by politicians who were prevented by printing gold without covering their money.
The parity was therefore abolished (it lasted a little. Eventually the convertibility of the dollar to gold was dealt with in 1971), and the value of the dollar began to be based not on the metal equivalent, but mutual trust. The buyer believed that a roll with meat was worth a green banknote and the seller of the roll thought that he would buy a bottle of bourbon for a few such notes.
Gold was the basis of faith in money because it had real, tangible value. Since 1971, we have been dealing with a kind of illusion that works only because we believe that we can buy something for the money.
The secret is that, apart from mutual trust, there is one more guarantor – the state – who can enforce trust, e.g. by collecting taxes from citizens in a currency controlled by it. This element is missing from bitcoin.
Are you developing an alternative market or quick profit?
Have a look to bitqt review if you want to use digital currency as a convenient means of payment. Bitcoin would function at its best, and with limited supply and growing demand, the money would grow in strength, becoming a comfortable, quiet discreet and – in my opinion – most importantly – dependent on the economy, not politics.
Many threats await bitcoin
Unfortunately, we have no guarantee that everyone who uses Bitcoin is equally honest. What is the conclusion? This comes with the risk that the value of bitcoin is not naturally shaped by people interested in developing the new currency and sharing it, but is due to inflating its value by those involved in creating a bubble.
Since early users of the currency (e.g. thanks to the acquaintance with its creator) at the very beginning raised hundreds of thousands or millions of BTC for themselves, it can be expected that when the rate reaches a sufficiently high level, they may want to earn money quickly. Such fears can be met, among others on the Polish forum of enthusiasts of this currency:
There are many Altcoins already inspired by Bitcoin. But even if unpredictable, it’s reasonable to think that significant advances are needed before a new currency can surpass Bitcoin, given its established markets. Also, Bitcoin may be able to adopt the same improvements that competing currencies did, as long as the basics of the protocol were unchanged.