How to get started with Bitcoin Mining?

Bitcoins or Cryptocurrencies are like digital currencies and act like a tender or an asset class. However, Bitcoins are mined like gold. If mined properly and taken the right investment risk, you could be successful in mining your own Bitcoins. Bitcoin was first introduced in 2009, when the algorithm was created under the pseudonym Satoshi Nakamoto. He also set a finite limit of 21 Million Bitcoins that would ever exist, of which close to 17 Million are in circulation. That means a little less than 4 Million Bitcoins are waiting to be discovered.

What is mining? - One can obtain Bitcoins in three ways – directly buying it from any cryptocurrency exchange, accepting Bitcoins as a mode of payment for goods and services and by mining new Bitcoins. Bitcoin Mining is the processing of transactions in the digital currency system, in which the records of current bitcoin transactions, known as blocks, are added to the record of past transactions, known as the Blockchain. It is simply the verification of Bitcoin transactions.

Originally, Bitcoin mining was conducted on the CPUs of individual computers, with more cores and greater speed resulting in more profitability. However, over the years, the system is dominated by multi-graphics card systems; Field-Programmable Gate Arrays (FPGAs) and Application Specific Integrated Circuit (ASICs). The constant elevation in technology has made it more difficult for prospective new miners to start. To get around that problem, individuals often work in mining pools.

What is Blockchain? – Blockchain is a digital ledger that forms the backbone of Bitcoin. The Blockchain is extremely different from other conventional databases. Blockchain tends to distribute its data among a network of Bitcoin software’s rather saving everything in a central location.

A complete history of every bitcoin transaction is stored on the Blockchain, and all of these recorded transactions are open to public scrutiny. Before a bitcoin transaction is approved and processed by the network, it is verified using a cryptographic algorithm that checks the transaction against the histories stored on every computer in the network.

This process is complex, but it has one big advantage: it makes the Blockchain very difficult to hack. Blockchain allows two parties to execute a transaction without any intermediary. Blockchain allows financial institutions to execute and verify transactions discretely without any human intervention.

What are Nodes? – A node is an authoritative computer that runs the Bitcoin software and helps to keep Bitcoin running by participating in the relay of information. In a distributed network, the simplest way to define a node would be to say it is a point of intersection or connection with the network. It can act as both a redistribution point and a communication endpoint. Nodes spread bitcoin transactions around the network. However, Bitcoin doesn’t just need nodes; it requires lots of fully functioning nodes that have the bitcoin core client on a machine with the complete Blockchain. The more nodes, the more secure the network is.

By solving a complex mathematical puzzle that is part of the Bitcoin program and including the answer in the block. The puzzle that needs solving is to find a number that, when combined with the data in the block and passed through a hash function, produces a result that is within a certain range. Once the miners solve the puzzle, the block pops open and the transactions are verified. Miners used to get awarded 25 Bitcoins for finding this key, but in 2017 this has been reduced to 12.5 Bitcoins and will continue doing so every four years.

Other currencies equivalent to Bitcoins

From around $1000 in the beginning of this year, Blockchain based cryptocurrency bitcoin is today nearing $20,000 mark. The boom in Bitcoin value has also helped its rivals surge. Cryptocurrencies like Ethereum, Litecoin and Ripple too have soared to records in the past few weeks. Here are some closest rivals of Bitcoins.

Ethereum – It is one of the hottest rivals of Bitcoins. Launched in the year 2014, it is currently the second most valuable cryptocurrency. Like Bitcoin, it is also a type of Blockchain network. Ethereum is a decentralized platform that runs smart contracts. Applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.

The Bitcoin and Ethereum Blockchains differ primarily in purpose and capability. While the Bitcoin Blockchain is used to track ownership of the digital currency bitcoin, the Ethereum Blockchain can be used to build decentralized applications. The virtual currency associated with Ethereum is called Ether.

Ripple – It is reportedly considered as logical successor to Bitcoin. It was launched in the year 2012 by former Bitcoin developers and is a startup using Blockchain technology that as per its website connects Banks, payment providers, digital asset exchanges and corporates. It also operates as a payment network called RippleNet. XRP is Ripple cryptocurrency. It has been soaring to record high since Bitcoin jumped. Currently, Ripple XRP is up more than 7,000% from its 0.65% at the beginning of last year.

Litecoin – The digital currency Litecoin too has emerged as a strong rival to Bitcoin, giving tough competition to other cryptocurrency rivals like IOTA and Ripple. Litecoin has surged over 5,700% last year till December 12, whereas Bitcoin had gained 1,550% during the same period. It is a peer to peer cryptocurrency, launched in 2011. Litecoin is very similar to Bitcoin in its technical implementation. The biggest advantages of Litecoin are claimed to be speed and low fees. Litecoin uses Scrypt Algorithm; it reportedly demands memory instead of processor resources. Generating new Litecoin is possible through mining as well.

Zcash – It claims to be the first open, permission-less cryptocurrency that can fully protects the privacy of transactions using zero knowledge cryptography. Like Bitcoin, Zcash is a Blockchain based currency. Launched in October 2016, as per Zcash website, its monetary base too is the same as Bitcoin’s – 21 Million Zcash currency units and is mined over time.

It is a scarce token just like Bitcoin which can be transferred globally and exchanged to/from other Cryptocurrencies or flat currencies via online exchanges, in-person transactions etc. Recently, Zcash became the third digital currency to receive the backing of the Bitcoin Investment Trust and the Ethereum Classic Investment Trust.

Dash – Is an open source peer to peer cryptocurrency. Dash can be used to make instant private payments online or in-store using our secure open source platform hosted by thousands of users around the world. Bitcoins shortcomings led to the development of cryptocurrency Dash. Its three biggest benefits, as per its website, are said to be Instant, Private and Security. It claims to send payment confirmations in less than a second. Two protect user’s financial information by safeguarding their activity history and keeping balances private. Three transactions are claimed to be confirmed by 200 TerraHash of X11 ASIC Computer power and over 4,500 servers hosted around the world.

Monero – It is claimed to be a secure, private and untraceable cryptocurrency. The open source cryptocurrency created in April 2014 has been soaring for the past five weeks with prices more than tripling since early November. Monero Research Labs is also said to be working hard to bring down the network’s transaction fees by as much as 80%. Monero developers are said to be implementation Bulletproofs to bring down transaction sizes on the network.

IOTA – It is another emerging bitcoin rival. It has marked capitalization of Rs 0.75 Lakh crore. IOTA represents a third generation of Blockchain after the development of Bitcoin.

Impact of Blockchain on Search Marketing

If you’ve heard of Bitcoin then you most likely have heard of Blockchain, the technology that enables Bitcoin and other crypto currencies to exist and function. The technology is forecast to disrupt many industries as it allows users to conduct transactions without a middleman in a secure and transparent format.

Some of the industries that can potentially be disrupted are car sales, voting, ridesharing, real estate, insurance, sports management and loyalty cards. If Bitcoin is adopted by large companies such as Amazon or Walmart, it will certainly have an impact on the future of payments between search marketing agencies, website owners, advertisers and others. Contract agreements will also be impacted, as the Blockchain could be leveraged for more transparency and accuracy.

Blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value. It’s like a Google Doc spreadsheet that is shared with the public which displays transactions and is tamperproof. Many are considering Blockchain to be as impactful as the Internet was in the 90s.

In the digital marketing world, many central authorities, such as Google and Facebook, connect advertisers with website owners. For Example, Google is a central authority in programmatic ads, where it helps advertisers run ads on websites via the Google Display Network. Google essentially is the middleman that helps advertisers and website owners trust each other. If they already trusted each other, they would not need Google as an intermediary taking a cut of the profits.

Enter Blockchain, which can verify that every user is genuine with 100 percent accuracy and that the website owner is only charging the advertiser for genuine clicks through to their site. Then the website owner and the advertiser don’t need a middleman to arbitrate their agreement, which would save them money. Blockchain presents a big threat to Google’s Display Network revenue.

Blockchain being the unhackable distributed ledger is going to also help reduce online fraud. It will provide transparency for persons involved in a transaction without giving away their personal details, essentially proving they are a real person. Ad fraud is a big problem. It cost advertisers over $7 Billion in 2016. A number of players including Microsoft, the Interactive Advertising Bureau and DMA are already working on Blockchain based digital identification system.

As companies start to adopt Blockchain, they will need to integrate it with their websites. This involves the web developers as well as the SEOs, if they are trying to gain organic search benefits as well as display the information from the Blockchain transactions. This will present both technical issues and opportunities in which SEOs will have to work alongside developers to resolve compatibility issues with different content management systems and website platforms. As new Blockchains are developed and it is more widely adopted, it will certainly disrupt the search marketing industry in many other ways. For now, search marketers should pay close attention to Blockchain as it grows.

Bitcoin – The Digital Currency

It’s worth more than an ounce of gold right now. It’s completely Digital and it’s the currency of choice for the cyber attackers who crippled computer networks around the world in recent days. When the attackers' "ransomware'' sprang into action, it held victims hostage by encrypting their data and demanding they send payments in Bitcoins to regain access to their computers. Bitcoin has a fuzzy history, but it's a type of currency that allows people to buy goods and services and exchange money without involving banks, credit card issuers or other third parties. 

How Bitcoins work – Bitcoin is a digital currency that is not tied to a bank or government and allows users to spend money anonymously. The coins are created by users who ‘mine’ them by lending computing power to verify other user’s transactions. They receive Bitcoins in exchange. The coins also can be bought and sold on exchanges with U.S dollars and other currencies.

Why are Bitcoins popular? - Bitcoins are basically lines of computer code that are digitally signed each time they travel from one owner to the next. Transactions can be made anonymously, making the currency popular with libertarians as well as tech enthusiasts, speculators and criminals.

Is it really anonymous - Yes, to a point. Transactions and accounts can be traced, but the account owners aren't necessarily known. However, investigators might be able to track down the owners when Bitcoins are converted to regular currency. For now, the three accounts tied to the ransomware attack appear untouched and it'll be difficult for perpetrators to cash in anytime soon without getting traced. 

Who's using bitcoin? - Some businesses have jumped on the bitcoin bandwagon amid a flurry of media coverage. Overstock.com accepts payments in bitcoin, for example. The currency has become popular enough that more than 300,000 daily transactions have been occurring recently, according to bitcoin wallet site blockchain.info. A year ago, activity was closer to 230,000 transactions per day. Still, its popularity is low compared with cash and cards, and many individuals and businesses won't accept Bitcoins for payments. 

How Bitcoins are kept secure? - The bitcoin network works by harnessing individuals' greed for the collective good. A network of tech-savvy users called miners keep the system honest by pouring their computing power into a Blockchain, a global running tally of every bitcoin transaction. The Blockchain prevents rogues from spending the same bitcoin twice, and the miners are rewarded for their efforts by being gifted with the occasional bitcoin. As long as miners keep the Blockchain secure, counterfeiting shouldn't be an issue.

How bitcoin came to be - It's a mystery. Bitcoin was launched in 2009 by a person or group of people operating under the name Satoshi Nakamoto. Bitcoin was then adopted by a small clutch of enthusiasts. Nakamoto dropped off the map as bitcoin began to attract widespread attention. The currency obeys its own internal logic.

What is Blockchain Technology?

The Blockchain is an undeniably ingenious invention. By allowing digital information to be distributed but not copied, Blockchain technology created the backbone of a new type of internet. The Blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.

Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the Blockchain. Information held on a Blockchain exists as a shared — and continually reconciled — database. This is a way of using the network that has obvious benefits. The Blockchain database isn’t stored in any single location, meaning the records it keeps are truly public and easily verifiable. No centralized version of this information exists for a hacker to corrupt. Hosted by millions of computers simultaneously, its data is accessible to anyone on the internet.

Blockchain technology is like the internet in that it has a built-in robustness. By storing blocks of information that are identical across its network, the Blockchain cannot: Be controlled by any single entity and has no single point of failure. Bitcoin was invented in 2008. Since that time, the Bitcoin Blockchain has operated without significant disruption. The Blockchain network lives in a state of consensus, one that automatically checks in with itself every ten minutes.  A kind of self-auditing ecosystem of a digital value, the network reconciles every transaction that happens in ten-minute intervals. Each group of these transactions is referred to as a “block”. Two important properties result from this: Transparency and it cannot be corrupted.

By storing data across its network, the Blockchain eliminates the risks that come with data being held centrally. Its network lacks centralized points of vulnerability that computer hackers can exploit. Today’s internet has security problems that are familiar to everyone. We all rely on the “username/password” system to protect our identity and assets online. Blockchain security methods use encryption technology. The basis for this is the so-called public and private “keys”. A “public key” is a users’ address on the Blockchain. Bitcoins sent across the network gets recorded as belonging to that address. The “private key” is like a password that gives its owner access to their Bitcoin or other digital assets. Store your data on the Blockchain and it is incorruptible.

With Blockchain technology, the web gains a new layer of functionality. Already, users can transact directly with one another — Bitcoin transactions in 2016 averaged over $200,000 US per day. With the added security brought by the Blockchain new internet business are on track to unbundle the traditional institutions of finance. Goldman Sachs believes that Blockchain technology holds great potential especially to optimize clearing and settlements, and could represent global savings of up to $6bn per year.