Bitcoin is an independently managed digital currency that runs through an online transaction of values around the world without Government or bank control. To further simplify what Bitcoin is all about, it’s a cryptocurrency and a form of electronic cash. It is also a decentralized digital currency free from external interference that can be sent from user to user without a middle person.
The Cryptocurrency is a domain name registered in August 2008 and linked to Satoshi Nakamoto who is the author of the paper titled Bitcoin, a Peer-to-Peer Electronic Cash System. Nakamoto implemented the bitcoin software as open-source code and released it in January 2009 although his identity remains unknown.
On 3rd January 2009, the Bitcoin network was created when Nakamoto mined the first block of the chain known as the genesis block.
Bitcoin Price
Bitcoin price is set as a combination of different factors such as expenses on electricity, transaction fees and the installation/purchase of software.
However, the price is not determined by its cost price and is mostly estimated by consumer demand. As its price continues to rise at a slightly lesser 0.3403% per day over the past years counting from 2013 when the price was $754 to $8,243.66 as of 2019 – this is more than 170%.
Also, CNBC reported the electronic cash has been marching high since February 2019, as major companies, including Facebook, were announcing cryptocurrency-related projects. Facebook’s Libra Coin is mentioned as one of the major factors behind the surge of Bitcoin.
The other factor is an increasing consensus that bitcoin is a legitimate store of value for the digital age and more CEOs in the investment community are taking the crypto seriously.
However, here’s what Billionaires think of Bitcoin.
Value
The value of Bitcoin can be measured by its growing base of users, merchants, and startups. As it is with all currencies, bitcoin’s value comes only and directly from people willing to accept it as a means of payment and exchange.
Bitcoin’s value comes from its code, infrastructure, scarcity, adoption, divisibility, portability, fungibility, and recognizability. Most importantly it can be used as a store of value like gold or other commodities yet unlike its physical counterparts it can be transported from one end of the world to the other via communication channels in a matter of minutes.
How Bitcoin Calculator Works
Bitcoin mining calculator comes into play by inputting various parameters together and the calculator will show how long it will take to pay back the investment. Several parameters can be used to make the calculation and the more information provided the more accurate the result will be.
Calculating the upfront equipment costs
1. The hash rate of your Bitcoin mining hardware which is usually measured in GigaHashes per second. The higher the hash rate, the faster it can mine the Cryptocurrency.
2. The quantity of power (in watts) consumed by your miner
If you take your mining hardware’s hash rate and divide it by its power consumption, this will give you an indication of how efficient it is.
3. The power cost of mining bitcoin has been on the high side due to the amount of power used which depends on the size of your operation. The lower the price of your electricity, the more profitable your mining operation will be.
4. Pool Fees – if you’re in a Bitcoin mining pool, it probably charges a small percentage-based fee.
The pre-filled Information
1. The calculator will also have some pre-filled sections, which are continually updated.
2. The higher the electric current is, the more profitable mining can be.
3. The Bitcoin block reward is halved roughly every four years. In the year 2012, the reward was cut from 50 Bitcoins per block to 25. It is currently 12.5 Bitcoins per block but is predicted to fall to 6.25 in 2020.
4. As more people join the business, mining difficulty becomes a means to keep inflation under control, making it harder to mine Bitcoin.
Calculating the results
1. Once you’ve entered all your mining information, click “calculate” and the results will appear automatically. Some calculators will show your likely profits accordingly – maybe on an hourly, daily, weekly, monthly, and yearly basis. Most Bitcoin calculators display the results in US dollars.
2. Although certain values are pre-entered, such as the current price, some calculators let you change these to simulate potential future scenarios.
3. It’s worth bearing in mind those factors like Bitcoin price and mining difficulty can change rapidly. This means it’s important to ensure you have up-to-date calculations and don’t rely on past results. Each time your electricity costs change, you’ll also need to carry out a fresh calculation.
