China can’t seem to make up its mind on Bitcoin. In 2013, the People’s Bank of China prohibited financial institutions from using Bitcoin and other cryptocurrencies for transactions, yet Bitcoin itself was not made illegal. In April 2019, Bitcoin mining was on the list of “wasteful” industries which were to be eliminated, yet disappeared from the list in November. That was possibly because a month before, Chinese President Xi Jinping announced that the country would go all-in on blockchain technology, in order to be a world leader in the space — yet cryptocurrencies, which feature blockchain technology at its core, weren’t mentioned.
The beauty of Bitcoin is the stability and security of its blockchain, or its public ledger of transactions. Considered virtually unhackable, the Bitcoin blockchain is bolstered by a series of checks and balances within its community: miners are decentralized and located around the world, nodes that store the blockchain run software that ensures transactions align to Bitcoin protocol (and if they don’t, they’re rejected), the proof of work consensus says that only new blocks can be created after agreement from the network, and the blockchain is constructed in such a way that transactions are permanent and can’t be altered. …Read more
“How would you feel if you got a 50 percent pay cut? What if you knew in advance exactly when it was going to happen, and still there was nothing you could do to stop it?
It’s an unpleasant idea for anyone, but it’s pure reality for anyone deep into crypto.”
– Philip Salter, Head of Operations, for Hackernoon. October 3rd 2019
Crypto mining is the method by which Bitcoin or other cryptocurrency transactions are verified and added to the blockchain. This can be done by anyone with mining hardware — from independent individuals to scaled cloud mining facilities. These crypto miners run the “proof of work” math on their computers to verify crypto transactions, and when they add a block to the blockchain, they are rewarded for their work with newly created Bitcoin, as well as transaction fees. Without crypto mining, there would be no Bitcoin, no blockchain — and especially no decentralization to the entire system.
A soundbyte news item recently took the crypto community by storm: 85% of the world’s Bitcoin supply has been mined.
It’s a little too easy for newbie crypto investors to interpret this data point as bad news. It sounds too much like “the end of Bitcoin is near,” and suggests a tone of doom for companies that depend on the popular cryptocurrency to function.