The world of cryptocurrency and mining

I think that anyone has heard about cryptocurrency and bitcoin in the past, but I doubt that everybody knows the crazy world behind it. Everybody knows that bitcoin can be used instead of money to do online payments that cannot be traced. But when I talk to people, even if they work in the field of information technology, nobody seems to know the very basics of cryptocurrency, how it works, how much is a bitcoin, how you can buy it, what are altcoins, how you can convert them to money or to different altcoins, how new coins are introduced, the fact that bitcoin increased exponentially in the last year and that it will grow even more. And do you know why I know? Because I was part of those people and it is one of my best regrets :-)

Every year in informatics is characterized by huge events. Youtube was born in 2005. Facebook started the story of social networks in 2006, followed by Twitter, Instagram and Google+. But 2017 is the year of cryptocurrency. When Bitcoin was launched in 2009, the first transaction was 100 bitcoins to buy a pizza, then other coins were introduced into the system and the value of a single coin improved a lot, even though you could buy bitcoins for way less than one dollar in 2009. Just to make you understand, in this moment, 1 bitcoin is $9500. If in the past you bought 100 bitcoins for 0.30 dollars, now you would have had $950,000, about one million of dollars. Imagine when bitcoins were used mostly to make illegal transactions, mostly in the world of deep web, and imagine that those people, unlike me, knew everything about the world of bitcoins since 2009 and now they are filty rich. But jokes apart, the news that bitcoin improved exponentially is recent and it is spreading all over the world. The latest bitcoin forecasts say that bitcoin should increase even more in the future, but the predictions may diverge. Somebody says that the bubble will explode soon while other people say that, on the base of the current trend, it should reach about $50,000 in 2020. So, even if bitcoin is the heaviest coin on the market of cryptocurrency and it's reaching its maximum saturation in terms of circulating coins, it should increase even more in the future. So bitcoin and cryptocurrency in general are becoming in the understanding of people a great investment to make huge quantity of money. You don't have to do a boring job every day of your life, the only thing that you need to do is: buy $30'000 of bitcoins, wait 2-3 years, make $150'000 of bitcoins: that's it. Another thing to make profits is to exchange from one currency to another, to take advantage from the market fluctuations. In this case, you don't even need that the value improves, but you can make money through wise choices. You could sell altcoins when the value is rapdly decreasing and buy them again when the value is high again, doing what is called "trading". Now that the news is spreading along its huge promises, everybody is buying bitcoins or altcoins to make profits from fluctuations and trading. But that's not all.

The mechanism of cryptocurrency is similar to peer-to-peer file sharing, where the files are coins on your computer, stored with asymmetric encryption by a particular software in one data file that is called "wallet". But differently from file sharing, you cannot introduce new coins to the system with "copy & paste". You can move money from one wallet to another using the public key, or introduce new money to the system with something that is called "mining". To introduce new money, your mining software must synchronize to your currency network, solve some math problems, give a "proof of work" and if everything is okay the money is awarded into your wallet, using your public key. The math problem to solve has a level of difficulty that depends on the algorithm adopted by the system and the amount of coins mined so far. For instance, bitcoin mining is based on the generation of sha256 hash codes, and the quantity of hash codes required by the system increments on the base of the already mined bitcoins, so the difficulty increments over time. The huge interests for bitcoins during the last years moved many people in the world to invest on hardware and produce computation power, just to generate those hash codes and gain the money. If in the past you could get bitcoins mining with softwares running on your PC-desktop, now this is almost impossible because you need to generate at least thousands of billions of hashes per second (TH/s) to get dozens of dollars per day. Not even the most powerful GPU on the market is enough to generate such a gigantic quantity of hashes, so many companies produced application specific integrated circuits (ASIC) hardware to mine new bitcoins. Currently you can buy this hardware even on Amazon. The most powerful is Antminer S9 and it can generate something like 14 TH/s with a power consumption of 1300 W. If you calculate the cost of energy and the produced bitcoins (standing to cryptocompare.com), today you can still have a profit of about $20 per day, that is not bad if you consider that we are talking about bitcoin, that is the first cryptocurrency ever existed with the maximum level of difficulty and that the value can increment exponentially. However, if mining bitcoins is too expensive for you, you can mine other bitcoins with your GPU and convert them into bitcoins with one of the existing exchange platforms (like shapeshift.io or changelly). You can also enjoy a mining pool, using web platforms like Nanopool (nanopool.org) or Supernova (suprnova.cc). Anyway, consider that most of these solutions will be a waste of time (and energy) on most of the pc-desktop configurations. You may need a very powerful graphics card, like NVIDIA GeForce 1080 TI or the latest AMD Radeon RX series to do it.