Bitcoins; a term that has started to sound more and more familiar around forums, IRC, and the rest of the internet’s underworld, is a new digital currency that doesn’t depend on any central bank or organization, instead it depends on a P2P (peer to peer) network built between its users. Unlike any real currency, or other online payment form, it does not get its value from reserves of gold or other forms of money, so why should anyone invest in bitcoins?
An accountant would highly advise you to stay away from bitcoins, they’re not real, they don’t have a fixed value, and are not really safe. While an anti-corporate geek will tell you that it is the currency of the future, and that it doesn’t depend of the economical, or political status of any country.
Our regular money gets its value from real gold stored at banks, but why does gold have any value? you can’t eat it, use it to build weapons, houses or cloths, it’s not even that beautiful! it is just valuable because it’s limited, and because society said so, thats where real money meets bitcoins.
While gold is found at mines, bitcoin transaction depend on blocks of data that are found using a complex process requiring huge processing power, this process is conveniently called “bitcoin mining”, the miner is rewarded an amount of bitcoins that is paid from bitcoin transaction fees.
Now lets talk about bitcoin mining, you need to dedicate your computer’s processing power to the calculation of hashes, you can work solo or as a part of a group called a pool, if you work solo, you’ll need to find your blocks alone, which is much more rewarding but almost impossible with regular computers now a days, as the process of finding new blocks gets harder every day. Working in a pool means that you just handle a portion of the work, the reward is then destribution among miners according to their contributions to the calculations.
While you can mine with your CPU, GPU mining is much faster and much more rewarding. My Core i7 2.67 ghz can do a humble 14 mega hash per second, while my ATI radeon 4890 OC is able to get around 120 mega hashes at stock frequencies. Usually ATI (AMD) GPUs are the best for mining due to their architecture nature, nVidia preformance is rather scarce .
The mining process on a GPU is very heavy and the temperature of the GPU and PSU will sky rocket in just a few seconds. Sove people are investing in mining by building mining dedicated machines using many GPUs on crossfire, reaching up to 3G hash/s, an investment that is looking more and more futile as the income of the investment is constantly decreaing due to the increase in the number of miners and the increasing complexity of the mining process. After a couple of hours of abusing my GPU at 75 C degrees and its fan running at 75% speed (LOUD) I only made 0.02 BTC which is 0.14 dollars at todays rates, so mining doesn’t look to be worth your time or electricity anymore.
So bottom line is, don’t go rushing into bitcoins, take a long time to read and understand everything there’s to it before doing anything, investing in mining hardware is generally a bad idea after 2011. let us know what you think.