mining

There is no mistake. “Holder” implies that at some point you will release. With HODL, community people came up with a different concept that is still something we are not aware as a collective. With so many discussions and attention on Bitcoin value (currently 11.000€, compared to 3.800€ from September 1st) the usual questions and arguments have been raised again. It’s a bubble! It’s not backed by anything! You can’t touch it! …and so on. Us hodlers we are betting on a different thing. Or couple more. But let’s explain a couple of things, just assuming you lived in caves for the past few years: There will be only 21 million Bitcoins mined in total. There is no way to print more. To mine Bitcoins, you need to invest in hardware, time and (lots of) electricity. Let’s start with the miners who invested into having computers (nowadays it’s dedicated machines that have no other usage at all) perform calculations (while providing a service to the network) using tons of electricity and generating so much heat that needed more electricity to cool things down (with miners located in cold regions having it easier. No kidding, there were plans from Google to move some datacenters in artic regions to use the natural cooling temperatures). Once coins have been mined (and it’s a bloody competitive thing to do, with networks of miners getting together to mine the same data, faster, to get the block rewards, but this is another story), miners will most likely sell few of them to pay back the electricity company and other bills. The current rate of creation of new blocks is 12.5 Bitcoin every 10 minutes. The network adjusts its difficulty of the mining calculations on regular intervals and block rewards will drop by half, making a mining operation less profitable, if the Bitcoin exchange value doesn’t go up by double. Because the electricity price won’t go down, you need to expect Bitcoin price to double at any halving of block reward. A block reward today [Read more...]