Bitcoin Mining after the halving: What will it look like in the days to come?
Bitcoin Mining after the halving is going to be much more difficult. Until the price catches up with the cut in bitcoin mined, miners with less efficient bitcoin mining equipment may find it is costing more to mine than they are making. this will cause many of them to shut down due to shear economic reality. This will possibly be a boon to the larger mining operations as the add more hashing power as well as more efficient equipment.
They might be up in value, but they’re down in supply. Bitcoins, everyone’s favorite cryptocurrency, are in high demand, but they’re getting harder and harder to mine for. And that’s actually written into the code. Every four years, Reuters reports, the reward for bitcoin miners is cut in half, in a move that was originally designed to keep bitcoin inflation in check. So on Saturday, rather than 25 bitcoins being made available to miners every 10 minutes, there were just 12.5.Being that they’re not physical pieces of currency, bitcoins are brought into circulation by people known as “miners.” These individuals run tens of thousands of computers at all hours of the day in order to process blocks of the latest bitcoin transactions, with rewards coming in the form of new bitcoins. In effect, these miners keep tabs on and validate the 225,000 bitcoin transactions that occur on a daily basis, and as a result, continuously increase the amount of currency in circulation (the current value of which is estimated to be $10 billion).
Source: Bitcoin Mining Just Got Harder as Reward is Halved | Digital Trends
Bitcoin Mining Pool Bitclub Donates $65000
Bitclub the bitcoin mining pool donated half of the proceeds from an apparently errant bitcoin transaction, in which 291 BTC (then $136,000) was sent as a fee, has been given away by the recipient mining pool.
The Bitcoin Foundation said today that it received 146 BTC ($65,000) from BitClub a Bitcoin Mining Pool, which on 27th April received the fee as part of block 409,008 on the network. The transaction drew notable industry attention and media coverage, given that the average transaction fee at the time was 31 satoshis, or less than $0.01.Following the incident, BitClub issued a public call for the individual behind the transaction to come forward. Should no users step forward to identify themselves, BitClub said, it would seek to donate the funds, with the Bitcoin Foundation being named as one of the possible recipients.
At press time, it remains unclear which additional entity or entities received the remaining 145 BTC. Further, analysis of the transaction suggests the actual bitcoins sent to the Foundation were not those received in the original fee transaction. Representatives for BitClub were unresponsive to attempts for additional clarity.
Bitcoin Foundation executive director Bruce Fenton said the funds will go toward the organization’s existing efforts, including funding education and public outreach as well as its DevCore conference series.”The Bitcoin Foundation funding will be used for existing projects as well as new initiatives that will foster community dialogue and encourage an efficient development process of bitcoin technology,” the organization said.
Additionally, the donation will help fund a research grant on the study of bitcoin security issues, to be conducted by Nick Szabo, the cryptographer credited with coining the term “smart contracts” as well as the tech’s key underlying concepts.The funding follows a tumultuous period for the foundation in which two board members resigned or were replaced, and as the organization was said to be running out of funding for operations.
Source: Bitcoin Foundation Receives $65,000 from Mystery Mining Pool – CoinDesk
I stumbled across Bitcoin a few years ago. At the time I was intrigued by the novelty of a currency that didn’t operate under the rules the currency has run under over the millennia. I don’t quite remember what year it was probably around 2012 I suppose. I really want to get involved with that at the time but it seemed that the hurdles were quite daunting and I did not spend the time to figure out exactly how to get my hands on some bitcoin. Fast-forward to 2015 and in November or perhaps late October I was once again looking at Bitcoin through a group called Bitclub. They offered a unique proposition where you could buy a share in the mining operation and benefit from the profits on a daily basis. I hemmed and hawed for several weeks and finally pulled the trigger at the end of November. I joined Bitclub and purchased my first mining share.
Bitcoin Mining Begins
It took 10 days to realize any sort of return due to the policy that equipment must be purchased prior to getting profits and they apply this ten-day waiting period. After the 10 days is up I started receiving bitcoin. My initial payout was about one dollar. Half of that dollar went towards repurchasing shares in the other $.50 could be used how I saw fit. I could either reinvest it or I could sell it for dollars or any other currency for that matter.
What happened to the other $.50 that got reinvested? Well it was used to purchase additional partial shares in the mining operation. This didn’t happen immediately as there is a threshold of half a percent of the price of the mining share before you can purchase partial shares and in this case it would take about five days because that amount is $2.50.
Amazingly enough after 10 days this partial share will start earning bitcoin at the same rate that my full share is earning. So to explain this an easy terms after five days I am now earning bitcoin on 1.005 shares. And after five more days I’m earning bitcoin on a 1.01 shares and so on and so on. What this is is compound interest on steroids. So over the last several months have been involved with this I have averaged around 2/10 of a percent per day increase in my mining shares or about 6% per month. With banking today paying a meager .001% per year this investment completely trounces any return you can get from a bank account in stocks on average do 7 or 8% per year and this is making almost that much per month.
I do need to mention however that I do reinvest every bitcoin that I did at this point is I’m trying to build up shares in the mining operation as quickly as possible. The way you operate this is up to you and with the minimum amount of 50% of mining earnings being reinvested if you only did that you would still make about 3% per month.
Another interesting phenomenon about all of this is that for the most part bitcoin has been on an escalator ride. My initial buy-in was around $338 per bitcoin and as of today it is hovering between 450 and $460. So not only do I benefit from the shares of bitcoin mining the shares have increased in value just due to the fact that bitcoin has been moving higher and higher.
So where do I think this is all heading in my novice eyes. With the majority of the world’s governments completely out of control and spending, coupled with the devaluation of the world’s major currencies many people are looking for places to put money that cannot be easily grabbed by the government. Some of these stores of wealth are gold silver and other precious metals as well as overseas bank accounts and real estate. Bitcoin I think offers advantages of these vehicles plus it avoids some of the disadvantages such as the physical storage costs associated with precious metals or the costs associated with typical real estate such as upkeep and taxes.
Is bitcoin without risk? Absolutely not. There is inherent risk and everything. Bitcoin’s volatility can attest to that although the volatility has been much less recently. I think that bitcoin has a bright future ahead of it and if the economies of the world and their precarious state begin to tumble my bet is that many people will be taking a hard look at protecting their assets using bitcoin and other vehicles.