Many people have been looking at bitcoin mining as an alternative source of passive income. The machine does the work, while the person simply spends the coin — goes the prevailing wisdom.
Actually, bitcoin is a virtual currency, which means it does not have any existence on paper nor is it regulated by a country’s central bank and printed on state owned security papers, like paper currency. On the contrary, the currency is ‘mined’ and is also the very first virtual currency that is controlled by a series of increasingly complex ‘cryptographic protocols’ rather than the governments of states, as is the case with conventional paper currencies.
However, is it possible to make some ‘real money’ from this? Well, theoretically, yes. All that needs to be done is to turn your PC into a ‘node’so that it becomes a small cog in the vast network (part of the blockchain on which the currency survives) that has the power to actually process and verify even individual transaction. Once a ‘block’ in every individual blockchain is actually processed, it in turn, creates a fresh block of twenty-five coins. Although their value fluctuates on a daily basis, but let us take an approximate estimate of around 2500 US dollars. In a nutshell, this process of creating new blocks in the chain is colloquially referred to as ‘bitcoin mining.’
The technical requirements for mining bitcoin
From the technical point of view, all that is required to join the network as a miniscule node and start generating bitcoin is a computer with an internet access. The best way to do this is to download a ‘free wallet’ onto the computer system. This is just one of many different free miner programs that are available today and simply ‘plugged in’ into the network.
In theory, it seems as easy as pie. But unfortunately, the practical aspect is anything but rosy as such, thanks to the tremendous amount of computer power required for the job at hand. Using a simple home-based PC or laptop, the odds are that even if you are online 24/7, it will still be literally years before you will be able to churn out even a single block. This is precisely why the large majority of miners (especially those in China who have access to low cost electricity have set up vast mining farms) joined into a sort of an inter-dependent pool of fellow miners where all the work and reward is shared on an equal basis.
With the help of a pool or mining farm, the new coins are generated within a day as all the people in the pool effectively dedicate their system resources towards the common goal. Of course, the more the miners, the faster the new blocks (of 25 coins each) are created, but conversely, the lesser the amount to go around. So yes, this way, you may be able to acquire instant gratification, but with a very small part of the reward coming your way.