While bitcoin continues to reign supreme, thanks to its success, many other cryptocurrencies have emerged in the last few years; however, none of them has had the same impact or enjoyed the same popularity as bitcoin. There is one thing that aligns most cryptocurrencies more with precious metals than fiat currencies, and that is that they need to be mined. The mining process will differ depending on the cryptocurrency itself. Today, the focus is on bitcoin, so keep reading to learn more.
What Does it Mean to Mine Bitcoin?
Mining bitcoin is a process that obviously takes place in the digital space. The miners are able to use equipment and software which are designed to carry out the mining processes. The process itself involves using an algorithm to solve equations to free the bitcoins from the data blocks that they are hidden within. Mining is not the only way to acquire bitcoin. You can also purchase the coins from third parties. Paxful has a number of resources on cryptocurrency, including how to buy Bitcoin in the easiest way.
The Number of Bitcoins
A lot of people wrongly assume that the supply of bitcoin is limited, but this is not the case. There is a finite supply of bitcoins in the world; this is what helps them to hold their value. The supply is limited to twenty-one million bitcoins. As it stands, around nineteen million bitcoins have already been mined, which leaves around two million to be found and mined. It is tricky to predict when all the bitcoins will be mined, some people believe that it won’t happen until after the year 2100, but this is largely speculation.
What Will Happen When All the Bitcoins Have Been Mined?
Obviously, once all the coins have been mined, there won’t be any left to find. Bitcoin may decide to increase the allowance, but this is unlikely. Reaching the cap will have several effects. Firstly, as the supply dwindles, the miner’s reward for mining the bitcoins is likely to continue to get smaller; this has already been evidenced as the reward has continued to decrease since the first bitcoins were mined.
The mining process itself might become easier over time as the bitcoins left to mine become fewer. Finally, once all of the bitcoins have been mined, the supply will be scarce, with most of the bitcoins already being spoken for in one regard or another. This could then dramatically increase the price, which would be great for investors, but again this isn’t guaranteed; the price could also plummet.
To Conclude
Bitcoin is obviously one of the well-known and popular forms of cryptocurrency today. It is often a great gateway crypto to get into as a beginner investor or trader. That being said, unless you are particularly tech-savvy, it wouldn’t necessarily make sense for you to try your hand at mining bitcoin. While you are rewarded for every bitcoin or block you find, you also have to pay for the equipment and software needed, and it can take time, too, which is something that you should bear in mind.
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