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Bitcoin mining.

Started by Bitcoin, Feb 14, 2021, 08:32 am

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Bitcoin

Note that verifying 1 MB worth of transactions makes a coin miner eligible to earn bitcoin--not everyone who verifies transactions will get paid out.
1MB of transactions can theoretically be as small as one transaction (though this is not at all common) or several thousand. It depends on how much data the transactions take up.
"So after all that work of verifying transactions, I might still not get any bitcoin for it?"
That is correct.
To earn bitcoins, you need to meet two conditions. One is a matter of effort; one is a matter of luck.
1) You have to verify.
1MB worth of transactions. This is the easy part.
2) You have to be the first miner to arrive at the right answer, or closest answer, to a numeric problem. This process is also known as proof of work.
"What do you mean, 'the right answer to a numeric problem'?"
The good news: No advanced math or computation is involved. You may have heard that miners are solving difficult mathematical problems--that's not exactly true. What they're actually doing is trying to be the first miner to come up with a 64-digit hexadecimal number (a "hash") that is less than or equal to the target hash. It's basically guesswork.
The bad news: It's guesswork, but with the total number of possible guesses for each of these problems being on the order of trillions, it's incredibly arduous work. In order to solve a problem first, miners need a lot of computing power. To mine successfully, you need to have a high "hash rate," which is measured in terms of megahashes per second (MH/s), gigahashes per second (GH/s), and terahashes per second (TH/s).
That is a great many hashes.
If you want to estimate how much bitcoin you could mine with your mining rig's hash rate, the site Cryptocompare offers a helpful calculator.
Mining and Bitcoin Circulation.
In addition to lining the pockets of miners and supporting the bitcoin ecosystem, mining serves another vital purpose: It is the only way to release new cryptocurrency into circulation. In other words, miners are basically "minting" currency. For example, as of Nov. 2020, there were around 18.5 million bitcoins in circulation.   Aside from the coins minted via the genesis block (the very first block, which was created by founder Satoshi Nakamoto), every single one of those Bitcoin came into being because of miners. In the absence of miners, Bitcoin as a network would still exist and be usable, but there would never be any additional bitcoin. There will eventually come a time when Bitcoin mining ends; per the Bitcoin Protocol, the total number of bitcoins will be capped at 21 million.   However, because the rate of bitcoin "mined" is reduced over time, the final bitcoin won't be circulated until around the year 2140. This does not mean that transactions will cease to be verified. Miners will continue to verify transactions and will be paid in fees for doing so in order to keep the integrity of Bitcoin's network.
Aside from the short-term Bitcoin payoff, being a coin miner can give you "voting" power when changes are proposed in the Bitcoin network protocol. In other words, miners have a degree of influence on the decision-making process on such matters as forking.
How Much a Miner Earns.
The rewards for Bitcoin mining are reduced by half every four years. When bitcoin was first mined in 2009, mining one block would earn you 50 BTC. In 2012, this was halved to 25 BTC. By 2016, this was halved again to 12.5 BTC. On May 11, 2020, the reward halved again to 6.25 BTC. In November of 2020, the price of Bitcoin was about $17,900 per Bitcoin, which means you'd earn $111,875 (6.25 x 17,900) for completing a block.   Not a bad incentive to solve that complex hash problem detailed above, it might seem.
If you want to keep track of precisely when these halvings will occur, you can consult the Bitcoin Clock, which updates this information in real-time. Interestingly, the market price of bitcoin has, throughout its history, tended to correspond closely to the reduction of new coins entered into circulation. This lowering inflation rate increased scarcity and historically the price has risen with it.
If you are interested in seeing how many blocks have been mined thus far, there are several sites, including Blockchain.info, that will give you that information in real-time.
What Do I Need To Mine Bitcoins?
Although early on in Bitcoin's history individuals may have been able to compete for blocks with a regular at-home computer, this is no longer the case. The reason for this is that the difficulty of mining Bitcoin changes over time. In order to ensure the smooth functioning of the blockchain and its ability to process and verify transactions, the Bitcoin network aims to have one block produced every 10 minutes or so. However, if there are one million mining rigs competing to solve the hash problem, they'll likely reach a solution faster than a scenario in which 10 mining rigs are working on the same problem. For that reason, Bitcoin is designed to evaluate and adjust the difficulty of mining every 2,016 blocks, or roughly every two weeks. When there is more computing power collectively working to mine for Bitcoin, the difficulty level of mining increases in order to keep block production at a stable rate. Less computing power means the difficulty level decreases. To get a sense of just how much computing power is involved, when Bitcoin launched in 2009 the initial difficulty level was one. As of Nov. 2019, it is more than 13 trillion.
All of this is to say that, in order to mine competitively, miners must now invest in powerful computer equipment like a GPU (graphics processing unit) or, more realistically, an application-specific integrated circuit (ASIC). These can run from $500 to the tens of thousands. Some miners--particularly Ethereum miners--buy individual graphics cards (GPUs) as a low-cost way to cobble together mining operations. The photo below is a makeshift, home-made mining machine. The graphics cards are those rectangular blocks with whirring fans. Note the sandwich twist-ties holding the graphics cards to the metal pole. This is probably not the most efficient way to mine, and as you can guess, many miners are in it as much for the fun and challenge as for the money.
The "Explain It Like I'm Five" Version.
The ins and outs of Bitcoin mining can be difficult to understand as is. Consider this illustrative example of how the hash problem works: I tell three friends that I'm thinking of a number between one and 100, and I write that number on a piece of paper and seal it in an envelope. My friends don't have to guess the exact number; they just have to be the first person to guess any number that is less than or equal to the number I am thinking of. And there is no limit to how many guesses they get.
Let's say I'm thinking of the number 19. If Friend A guesses 21, they lose because of 21>19. If Friend B guesses 16 and Friend C guesses 12, then they've both theoretically arrived at viable answers, because of 16 What Is a "64-Digit Hexadecimal Number"?
Well, here is an example of such a number:
The number above has 64 digits. Easy enough to understand so far. As you probably noticed, that number consists not just of numbers, but also letters of the alphabet. Why is that?
To understand what these letters are doing in the middle of numbers, let's unpack the word "hexadecimal."
As you know, we use the "decimal" system, which means it is base 10. This, in turn, means that every digit of a multi-digit number has 10 possibilities, zero through nine.
"Hexadecimal," on the other hand, means base 16, as "hex" is derived from the Greek word for six and "deca" is derived from the Greek word for 10. In a hexadecimal system, each digit has 16 possibilities. But our numeric system only offers 10 ways of representing numbers (zero through nine). That's why you have to stick letters in, specifically letters a, b, c, d, e, and f.
If you are mining bitcoin, you do not need to calculate the total value of that 64-digit number (the hash). I repeat: You do not need to calculate the total value of a hash.
So, what do "64-digit hexadecimal numbers" have to do with Bitcoin mining?
Remember that ELI5 analogy, where I wrote the number 19 on a piece of paper and put it in a sealed envelope?
In Bitcoin mining terms, that metaphorical undisclosed number in the envelope is called the target hash.
What miners are doing with those huge computers and dozens of cooling fans is guessing at the target hash. Miners make these guesses by randomly generating as many "nonces" as possible, as fast as possible. A nonce is short for "number only used once," and the nonce is the key to generating these 64-bit hexadecimal numbers I keep talking about. In Bitcoin mining, a nonce is 32 bits in size--much smaller than the hash, which is 256 bits. The first miner whose nonce generates a hash that is less than or equal to the target hash is awarded credit for completing that block and is awarded the spoils of 6.25 BTC.
In theory, you could achieve the same goal by rolling a 16-sided die 64 times to arrive at random numbers, but why on earth would you want to do that?
The screenshot below, taken from the site Blockchain.info, might help you put all this information together at a glance. You are looking at a summary of everything that happened when block #490163 was mined. The nonce that generated the "winning" hash was 731511405. The target hash is shown on top. The term "Relayed by Antpool" refers to the fact that this particular block was completed by AntPool, one of the more successful mining pools (more about mining pools below). As you see here, their contribution to the Bitcoin community is that they confirmed 1768 transactions for this block. If you really want to see all 1768 of those transactions for this block, go to this page and scroll down to the heading "Transactions."



Bitcoin

"So how do I guess at the target hash?"
All target hashes begin with zeros--at least eight zeros and up to 63 zeros.
There is no minimum target, but there is a maximum target set by the Bitcoin Protocol. No target can be greater than this number:
Here are some examples of randomized hashes and the criteria for whether they will lead to success for the miner:
(Note: These are made-up hashes)
"How do I maximize my chances of guessing the target hash before anyone else does?"
You'd have to get a fast mining rig, or, more realistically, join a mining pool--a group of coin miners who combine their computing power and split the mined bitcoin. Mining pools are comparable to those Powerball clubs whose members buy lottery tickets en masse and agree to share any winnings. A disproportionately large number of blocks are mined by pools rather than by individual miners.
In other words, it's literally just a numbers game. You cannot guess the pattern or make a prediction based on previous target hashes. The difficulty level of the most recent block at the time of writing is about 17.59 trillion, meaning that the chance of any given nonce producing a hash below the target is one in 17.59 trillion. Not great odds if you're working on your own, even with a tremendously powerful mining rig.
"How do I decide whether bitcoin will be profitable for me?"
Not only do miners have to factor in the costs associated with expensive equipment necessary to stand a chance of solving a hash problem. They must also consider the significant amount of electrical power mining rigs utilize in generating vast quantities of nonces in search of the solution. All told, Bitcoin mining is largely unprofitable for most individual miners as of this writing. The site Cryptocompare offers a helpful calculator that allows you to plug in numbers such as your hash speed and electricity costs to estimate the costs and benefits.
What Are Coin Mining Pools?
Mining rewards are paid to the miner who discovers a solution to the puzzle first, and the probability that a participant will be the one to discover the solution is equal to the portion of the total mining power on the network. Participants with a small percentage of the mining power stand a very small chance of discovering the next block on their own. For instance, a mining card that one could purchase for a couple of thousand dollars would represent less than 0.001% of the network's mining power. With such a small chance at finding the next block, it could be a long time before that miner finds a block, and the difficulty going up makes things even worse. The miner may never recoup their investment. The answer to this problem is mining pools. Mining pools are operated by third parties and coordinate groups of miners. By working together in a pool and sharing the payouts among all participants, miners can get a steady flow of bitcoin starting the day they activate their miner. Statistics on some of the mining pools can be seen on Blockchain.info.
"I've done the math. Forget mining. Is there a less onerous way to profit from cryptocurrencies?"
As mentioned above, the easiest way to acquire bitcoin is to simply buy it on one of the many exchanges. Alternately, you can always leverage the "pickaxe strategy." This is based on the old saw that during the 1849 California gold rush, the smart investment was not to pan for gold, but rather to make the pickaxes used for mining. Or, to put it in modern terms, invest in the companies that manufacture those pickaxes. In a cryptocurrency context, the pickaxe equivalent would be a company that manufactures equipment used for Bitcoin mining. You may consider looking into companies that make ASICs equipment or GPUs instead, for example.
The legality of Bitcoin mining depends entirely on your geographic location. The concept of Bitcoin can threaten the dominance of fiat currencies and government control over the financial markets. For this reason, Bitcoin is completely illegal in certain places.
Bitcoin ownership and mining are legal in more countries than not. Some examples of places where it is illegal are Algeria, Egypt, Morocco, Bolivia, Ecuador, Nepal, and Pakistan.   Overall, Bitcoin use and mining are legal across much of the globe.
Risks of Mining.
The risks of mining are that of financial risk and a regulatory one. As mentioned, Bitcoin mining, and mining in general, is a financial risk. One could go through all the effort of purchasing hundreds or thousands of dollars worth of mining equipment only to have no return on their investment. That said, this risk can be mitigated by joining mining pools. If you are considering mining and live in an area that it is prohibited you should reconsider. It may also be a good idea to research your countries regulation and overall sentiment towards cryptocurrency before investing in mining equipment.
Bitcoin mining: How does Bitcoin mining Work.
Where do new Bitcoins come from? What is Bitcoin mining and how do you start mining Bitcoin? Fiat currency--government-backed currency such as the Dollar or Euro--is printed by individual countries. But cryptocurrency has its own set of rules. In this article, we'll take a look at where Bitcoin comes from and what it means to be a Bitcoin miner, including some of the overhead costs miners encounter. After all, understanding Bitcoin mining is at the heart of understanding how cryptocurrency works--and why it's a better global economic system than the one we're used to.
Some background on Bitcoin and Bitcoin miners.
Bitcoin is a currency that is both decentralized and deflationary by nature. In other words, it's the opposite of fiat currencies, which are controlled by a central entity and subject to inflation. That's because written into Bitcoin's code is:
A cap of 21 million Bitcoins that can ever be created That Bitcoin is to be governed by a peer network, known as Bitcoin miners , responsible for ensuring the coin's integrity. Approximately every four years, the number of Bitcoins miners receive as a reward for their work is cut in half.
To understand Bitcoin mining and why it exists, let's start by looking at the technology behind Bitcoin. When we take a purely digital currency, how do we keep track of how many Bitcoins each person has? Bitcoin is based on the Blockchain--a giant ledger of every Bitcoin transaction. But unlike a bank account or a private ledger, the Blockchain is not only out in the open for everyone to see, it's also maintained by the very people who use it. These Bitcoin miners use special mining computers and a series of complex algorithms to verify each transaction. Those transactions are then added to the Blockchain, and become an unerasable part of Bitcoin's history. In this way, the currency is both decentralized--that is, it's not controlled by any one government or entity--and tamper-proof.
Accounts for the creation of new Bitcoins Maintains the integrity, authenticity, and safety of the Bitcoin network.


Bitcoin

Creating new Bitcoins.
Why do Bitcoin miners do what they do? Because they earn a Bitcoin reward for their work. This is where the 21 million Bitcoins that can be created come in. Most Bitcoin transactions are trades between people or exchanges of already existing Bitcoin. For example, if you buy Bitcoin from Coinmama, that transaction will be confirmed and then will appear on the Blockchain as part of a block (or several transactions). But as an incentive to confirm that block, the miner who does so first will receive a certain number of brand new Bitcoins as a reward, which is then sent to their Bitcoin mining wallet.
How many Bitcoins are in the reward? That number changes approximately every four years. When Bitcoin was first released, the number of coins in the reward was 50. Then in 2012, it was cut in half to 25. In 2016, it was halved again to 12.5. And on May 11, 2020, the Bitcoin reward was once again cut in half to 6.25. The reward is cut in half every 210,000 blocks, and because it's written into Bitcoin's code that a new block will be issued every 10 minutes, this Bitcoin Halving takes place approximately every four years. This extends the life of the 21 million Bitcoins that can ever be created, and establishes Bitcoin as a deflationary asset.
Maintaining the integrity of the Blockchain.
The Blockchain is the key to keeping Bitcoin tamper-proof, and the main role of Bitcoin miners is to maintain the integrity of the Bitcoin Blockchain.
When a transaction is made, it's added to a block. Once enough transactions are on a block, that block is confirmed through computing power and added to the Blockchain. Once a block is added to the Blockchain, it is public, and it is almost impossible to alter it. In this way, the Blockchain stays tamper-proof.
But how do miners confirm transactions?
Proof of Work and Proof of Stake.
Cryptocurrency mining requires proving that a transaction is authentic. One way this is done is through Proof of Work . In this method, special computers are used to solve complex cryptographic equations in order to prove that a block of transactions is legitimate. The first miner to solve the problem is the one to get the Bitcoin reward. The downside of Proof of Work is that it takes a lot of time and a lot of electricity, making mining both expensive and slow.
While Bitcoin uses Proof of Work, other cryptocurrencies aim to solve some of its problems by using Proof of Stake . In this method, miners put cryptocurrency they already have into the system, betting that they'll be able to solve the block problem first, and the reward they receive is based proportionally on what they put in.
If it seems unfair that the Bitcoin reward keeps dropping every four years, it's worth looking at the number of Bitcoin in the reward versus the Bitcoin price. At the time of the 2012 Bitcoin Halving, the Bitcoin price was about $12. So a reward of 25 Bitcoin yielded approximately $300. At the time of the 2016 Bitcoin Halving, the reward dropped to 12.5 Bitcoin, but the price had risen to $657. Meaning the Bitcoin reward was $8,212. Currently, the Bitcoin price is approximately $8,500, which means a reward of 6.25 Bitcoin will still yield $53,125.
So why aren't we all Bitcoin miners if we could potentially make $53,125 every 10 minutes? For one thing, Bitcoin mining isn't so simple, and it's definitely not cheap. Successful mining requires a heavy investment in a lot of very expensive equipment. (You can't mine Bitcoin on your home computer.) It also requires a lot of electricity--some people estimate that the amount of electricity required to mine Bitcoin is equal to the amount of electricity required to power a small country--so unless you're living in a country where electricity is very cheap, mining probably isn't worth it. There's also no guarantee that you'll be the first miner to validate a block and earn the reward. In other words, even if you invest in the equipment and electricity, you may not earn back what you've put in. And as the price of Bitcoin rises and the block reward increases in value, the competition among miners heats up as well, making it less probable that you'll be the one to earn the block reward.
The best way to build your Bitcoin portfolio is to buy Bitcoin through an exchange such as Coinmama.
Bitcoin mining machine hardware.
While in the earliest days of Bitcoin you could mine cryptocurrency on your personal computer, today that's no longer possible. The price increase of Bitcoin drove competition up, creating harder and harder algorithms that couldn't be computed on personal equipment. Today if you want to be a Bitcoin miner, you need to build a Bitcoin mining rig, and invest, at minimum, in a special Bitcoin mining computer known as an ASIC.
Even with the right Bitcoin mining computer, it's not worth it to mine alone. That's because as an individual, you'll be competing against Bitcoin mining farms, which have much more equipment, and therefore a much greater chance of reaching the right answer first. One solution some miners have found is to join a Bitcoin mining pool, or to join forces with other miners. The upside of joining a mining pool is that it gives you more resources and a greater chance of getting the block reward. The downside is that there are often fees involved, and you have to share the block reward with the rest of the pool, making your profit smaller. Still, if you're determined to start mining Bitcoin, it's best to do so through a Bitcoin mining pool.
At the end of the day, Bitcoin mining is an integral part of making Bitcoin work. Without it, the Blockchain wouldn't function properly, Bitcoin transactions wouldn't be confirmed, and Bitcoin would lose all meaning. Miners are essential to the operation of Bitcoin.
Yet for the average person, the investment required to be a successful miner is out of reach and unprofitable. For almost everyone except a small handful of people who not only want to make the investment but also live in one of the best countries to be a Bitcoin miner , the cheapest and most efficient way to get Bitcoin is simply to buy it through an exchange or broker that specializes in the sale of Bitcoin.
Related articles.


Bitcoin

Diversified Portfolios Need Bitcoin.
Investors should look not at the risk and return of individual assets, but at how they blend together into a diversified portfolio.
Coinmama has all the information you need to get informed about Bitcoin mining. Discover how Bitcoin mining works, what Bitcoin pools and Bitcoin mining hardware are, and more. Visit Coinmama to learn more today!
Bitcoin Halving 2020: Everything You Need to Know.
Learn all about the Bitcoin Halving 2020 and how it will likely affect the Bitcoin price. Visit Coinmama to get up-to-date information and buy BTC before the Bitcoin Halving takes place!
10 Reasons to Buy Bitcoin in 2020.
Bitcoin is changing the world. But if you need concrete reasons why it's the future of money, Coinmama has 10 reasons to buy Bitcoin in 2020.
10 Moments That Defined Crypto in 2019.
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Back to the future: the Earliest Bitcoin News.
There's no shortage of Bitcoin news, but what did that news look like when BTC first debuted? We take a look at Bitcoin's history through early articles.
Happy Birthday Bitcoin! A Look-back at 11 Years.
As Bitcoin turns 11, we take a look back at the cryptocurrency's history and evolution with a timeline of Bitcoin's greatest highlights.
When to Sell Bitcoin: 3 Investment Strategies.
When you make an investment, knowing when to sell is as important as when to buy. But when is the right time to sell Bitcoin? We take a look at three strategies.
Bitcoin HashRate Explained (2019)
If you follow crypto news, you might have seen reports of Bitcoin's hashrate pushing above the 100 exahash (or 0.1 zetahash) level recently. In this article, we'll address all these questions and more. While the topic may seem technical, it's really not that difficult to understand.
How Does Bitcoin mining Work?🤸‍♂️Beginner Friendly.
In very simple terms, Bitcoin mining is a payment gateway made up of thousands of computers around the world which compete to solve a puzzle first in exchange for Bitcoin as reward.
Therefore, each time some one sends Bitcoin to another person anywhere around the world, the Bitcoin miner will verify, validate this transaction and get Bitcoin as incentive.
Bitcoin mining sounds easy on paper but...
In 2008, it was possible to mine Bitcoin from a simple computer.
Now, if you attempt to mine Bitcoin on your laptop, it would most likely damage your computer.
The way the Bitcoin algorithm is set up, is that the more people enter the system, the more the puzzle becomes more difficult to solve.
Bitcoin has an inbuilt difficulty regulator which is called the "proof-of-work", meaning the more people/computers enter to mine, the harder it will be to solve issue and more efficient tools will be needed.
So, as more people started mining the Bitcoin, the mining difficulty increased.
As the mining difficulty increased, the miners started using GPUs to mine (as shown below).
However, with the Bitcoin halvings and new incoming miners, the GPU miners also became obsolete.
New specialized and efficient mining equipment called ASIC Miners were introduced.
ASIC stands for Application-Specific Integrated Circuit.
ASIC Miners are specialized equipment created for the sole purpose of mining cryptocurrency.
ASIC Miners require some heavy investments and come at a risk:
An ASIC Miner cost around $1500 excluding shipping They are very loud so you would need to put it in an isolated area. They generate a lot of heat and therefore not recommended in warm climates. They consume of lot of energy have been banned in many countries for this reason.
Another risk that many people do not realize when getting into Bitcoin is that they are competing with large mining farms in China and their revenue will be from transaction fees rather than reward blocks.
This is an important factor to consider simply because during bear markets, there are not enough transactions to make it worthwhile.
In 2018, we saw dozens of Youtubers document their loss and quit Bitcoin mining all together.
Why is Bitcoin mining Important.
Bitcoin is a currency as well as a payment gateway.
Bitcoin is not owned by any individual nor government and therefore relies on the mining power of miners to keep the network running.
What if Bitcoin Miners did not exist?
If all the miners decide to stop mining Bitcoin, then Bitcoin transfers would not stop taking place and the network would stop working.
How do bitcoin miners mine bitcoin specifically?
As established above, mining Bitcoin on a basic computer is unrealistic and on a gpu not profitable unless you live in a country with ridiculously cheap electricity.
However, Antminers are usually plug-and-play along with some slight power customization.
SoloMining vs Minepool.
Because the chance of success is too low for individual miners, Bitcoin miners team up to share computing power and therefore increase their chances of rewards.
However, not all Minepools have the same conditions and reward systems.
Because of all the risks involved in buying the hardware to mine Bitcoin, some people have turned to Cloud mining.
Cloudmining basically refers to renting out mining equipment from cloud mining companies such as Genesis Mining and Hashflare.
However, the same principles apply as above and the chances of any significant profit are improbable.
If you would like to know more here are my reviews after testing them:
Bitcoin mining Farms.
Bitcoin mining requires energy and the only way for it to be profitable is mine Bitcoin large scale.
Greenidge, previously a coal-fired electrical power plant that has converted to natural gas which also supplies electrical power to New York State's residents, is now one of the largest Bitcoin mining facilities uses over 20 megawatts (MW) of power to mine Bitcoin.
Only 21 Million Bitcoins can ever be created and at the time of writing, 18.5 million Bitcoins have been mined so far.
Also the number of new Bitcoins that can be generated get halved every 4 years.
This means that the mining difficulty will also increase.
So if you want to get Bitcoin, it is cheaper and easier just buy bitcoin with a credit card.
Let me know what you decide to do next on Twitter or Facebook 😉 Cheers, Marie Founder of Satoshi Library.
PS Thank you for visiting! And also, if you feel comfortable enough to give me your email, just enter it below and I just might send you an email one of these days 😉
Disclaimer: I am not a financial advisor and the information provided does not replace professional advice. Cryptocurrency prices are highly volatile as well as evolving very quickly. This post may contain inaccuracies, so please do your own research before placing money in any website. Thanks!
How Does the Process of Bitcoin mining Work?
Unlike traditional currencies, bitcoins are not printed; instead, bitcoins are mined. If you think that bitcoins are mined by using shovels and other equipment, just like the gold are mined from gold mines, you are mistaken.
Bitcoin is not a physical currency. Thus, the process of getting bitcoins is not the same as the process of getting traditional currencies.
Why is the process called Bitcoin mining?
Well, just like the gold occurs in gold mines, bitcoins occur in protocol design. As per the bitcoin protocol, only 21 million bitcoins can be mined. By the process of Bitcoin mining, miners will bring these 21 million bitcoins to light. Once all of 21 million bitcoins are mined thoroughly, there won't be any bitcoins left to be mined. Miners involved in the Bitcoin mining process get transaction fees for creating blocks and validating different bitcoin transactions.
The working of Bitcoin mining is pretty simple and straightforward. To understand how mining works, you have to know about nodes. A node is a powerful computer that runs the software, which helps validate the bitcoin transactions and blocks. The bitcoin network works in a decentralized form, and thus the nodes are collectively responsible for validating bitcoin transactions.
Anyone can quickly run a node. All you need to do is download the bitcoin software. The most significant advantage with the node is that it consumes lots of energy, and it needs lots of storage space; thus, a standard computer with limited storage won't be able to mine bitcoins. The bitcoin network writes hundreds of gigabytes of data. The nodes are used to properly spread bitcoin transactions across the network. One node helps in sending information to a few nodes that it already knows about. Then the other nodes relay information to a few others, and in this way, the bitcoin network functions. You can visit Like this website to get details about how nodes functions.
Among all these types of nodes, some nodes are called mining nodes, and they are usually called miners. These nodes help collaborate different transactions into chunks or blocks, and then, these are added to the bitcoin network. Blockchain technology is the idea behind these fantastic tasks performed by nodes.
The addition of these bitcoins into blocks and networks is like solving a puzzle. When data is combined in the blocks, it has to pass through a hash function. The hash function makes it quite challenging to know what output it will get. Thus, the miners have to guess the mystery number, and they apply the hash function to the combination of the guessed number and the data stored in the block. The hash mostly begins with a certain number of zeroes. There are almost negligible chances of people knowing which number will work. This is because two consecutive numbers used can give a varied range of results. Thus, the miners keep on trying with different block configurations.
The calculations are pretty tricky as the miners don't have any idea or information about how many zeroes are needed at the time of creating hash strings. Thus, it takes at least 10 minutes on an average to process the block.
Ten minutes is needed to process blocks as this is the amount of time required that bitcoin developers think that it will be required to get a steady and diminishing flow of new coins till the time goal of 21 million is reached. As per a few research, the purpose of 21 million will be reached sometime around 2041.
Numerous miners are involved in this task, and the first miner who gets the result announces his/her victory to the rest of the network. Then, all other miners stop working on that block, and they start figuring out the mystery of the next block. As a reward for getting the victory, the miner gets some new bitcoins as rewards.
At present, the reward for getting a victory is 6.25 bitcoins per block. This means it is almost worth $60,000 in June 2020.
Hundreds of miners work day and night to get the reward. The more and better calculation you can perform, the more victory you will get. We hope this article will help you in understanding the functioning of bitcoins.


Bitcoin

Bitcoin mining Difficulty - What is it And How Does it Work?
Before we even begin to understand what Bitcoin mining difficulty means, we need to know how mining works. We have covered this topic in detail before, so we will just give you a little overview before getting into the different nuances of difficulty. Following that, we will look at how mining difficulty is calculated and how it changes to suit the network's needs.
How does mining work? How long does it take to mine 1 Bitcoin?
Bitcoin's network has several specialized nodes called "miners" who use specialized equipment to solve cryptographically hard puzzles. If they are successful, then they will get the opportunity to add blocks to the BTC blockchain successfully. This is how it works:
The miner picks up transactions waiting in the mempool and hashes them. They add a random hexadecimal value to the front of the hash and hashes the entire value.
This hash needs to be less than a particular value, which is called "difficulty."
What determines Bitcoin mining difficulty? Why does BTC difficulty increase?
#1 To maintain network integrity.
The level of Bitcoin mining difficulty increases or decreases according to the ease of mining within the protocol. Remember, Bitcoin needs to have a consistent block time of 10 minutes. In other words, new BTC can be injected into the circulating supply every 10 minutes. To make sure that this timing doesn't change the Bitcoin protocol:
Increases network difficulty when it becomes easier for miners to mine. Decrease network difficulty when it becomes harder for miners to mine.
The Bitcoin network has a universal block difficulty. All valid blocks must have a hash below the target. Mining pools also have a pool-specific share difficulty setting a lower limit for shares.
#2 Relationship with hash rate.
One of the critical metrics in judging the health of a proof-of-work network is hash rate. Simply put, hashrate shows you how powerful the miners are within the network. Higher the bitcoin network hashrate, higher it's overall security and speed. However, these networks need to keep their hashrate under control for consistent block production. This is why, when hashrate becomes high, the bitcoin difficulty eventually gets higher as well, making it tougher for miners to mine easily within the network.
The inverse is also true.
If Bitcoin's hashrate decreases, the network difficulty will reduce as well. Hashrate may decrease because of the following reasons:
Bitcoin currently has a high difficulty, which is why the miners are having a tough time mining in the system. The price of BTC went down, which is why a lot of miners quit mining.
To understand the correlation between the two, let's check out their graphs. Up first, we have the hash rate.
After that, we have the bitcoin difficulty chart:
As you can see, there is a very close correlation between the two. Around March 26, the network difficulty fell by 16% from 16.55 trillion to 13.9 trillion. This was the largest crash in network difficulty since early 2013. To understand why this happened this time around, look at how the hashrate dropped as well just before the bitcoin difficulty drop. This dip occurred because of Bitcoin's price crash, which forced a lot of miners to quit operations.
How does Bitcoin calculate difficulty?
Bitcoin's network difficulty changes every 2016 blocks. The formula used by the network to calculate difficulty goes like this:
difficulty = difficulty_1_target / current_target.
In the formula above:
target is a 256-bit number. As per Bitcoin's protocol, the targets are a custom floating-point type with limited accuracy. Bitcoin clients approximate difficulty based on this fact. This value is also known as bdiff. difficulty_1_target can be different depending on how you choose to measure difficulty. Traditionally, it represents a hash where the leading 32 bits are zero and the rest are one. In fact, this value is also known as pool difficulty or pdiff.
Every single block stores a packed representation of bitcoin difficulty in their blocks called "Bits." This target usually appear as 0x1b0404cb (stored in little-endian order: cb 04 04 1b).
A block calculates the target value via a predetermined formula. Eg. With the packed target given above, i.e. 0x1b0404cb. The hexadecimal target is:
0x0404cb * 2**(8*(0x1b - 3)) = 0x00000000000404CB000000000000000000000000000000000000000000000000.
Now let's calculate bdiff and pdiff.
The highest possible target (difficulty_1_target) is defined as 0x1d00ffff or, in hex form:
0x00ffff * 2**(8*(0x1d - 3)) = 0x00000000FFFF0000000000000000000000000000000000000000000000000000.
Now that we know this value, we can use this to calculate our bdiff using the difficulty = difficulty_1_target / current_target formula.
Now, as we have defined in the previous section, the current_target is 0x1b0404cb or 0x00000000000404CB000000000000000000000000000000000000000000000000.
So, to calculate current difficulty:
Hence, bdiff is 16307.420938523983.
Now, let's calculate the pdiff. Mining pools tend to use non-truncated targets which puts difficulty_1_target at 0x00000000FFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFF.
If that's the case then for the same current_target, our pdiff will be:
Here is a program code taken from Bitcoin wiki which relies on logs to make difficulty calculation easier:
inline float fast_log(float val)
int * const exp_ptr = reinterpret_cast (&val);
std::cout How do you set a mining difficulty?
Miners use specialized ASIC hardware to mine Bitcoins. These machines are extremely fast and produce tetrahashes every single second. It will be extremely impractical for a system to painstakingly check every single one of them to see if they satisfy all the necessary conditions, or not. This is exponentially true for mining pools. They can't check all the hashes produced by a bitcoin miner every single second. This is why mining pools use a concept called "Share Time."
So, let's imagine that your Bitcoin mining pool has set a Share Time of 5 seconds. This means that, on average, your mining pool will require miners to submit a share to them every 5 seconds.
How exactly is this done?
Your Bitcoin mining pool will set a value called Share Difficulty for every miner. The share difficulty of a miner is directly proportional to their individual hashrate. As such, higher the miner's hashrate, higher their Share Difficulty. The idea is that the miner will use their equipment to generate tons of hashes. The moment they find a hash that meets the target Share Difficulty, they will send the hash to the pool.
How are the miners rewarded?
Miners in the pool are rewarded on a "Pay per share" (PPS) basis. In this system, the miners get rewarded for the shares they submit. The values of the shares are entirely dependent on how difficult it was to discover the share.
Let's take an example to see how this works:
Suppose you are a miner with an individual hashrate of 50 TH/s. The mining pool that you have joined has set your Share Difficulty at 1,000,000. The moment that you get shares above 1,000,000, you'll be rewarded by the pool. The pool may change your difficulty to make sure that you are not submitting your shares too quickly. Now, if you buy some new equipment and increase your hashrate to 150 TH/s, the pool will increase your difficulty to 3,000,000. You will be submitting shares at the same rate that you were previously submitting. However, you'll get 3 times the reward that you were previously receiving for the shares you submit. The reason why pools recommend higher difficulties for faster hardware is to reduce network load on both the miner's system and the pool. It also reduces decreases the restart delay for your mining hardware as it prepares for the next work unit. At the same time, the pool must be careful not to set the difficulty too high which will result in a lot of stale shares.
NOTE: Share Target = 1 / Share Difficulty.
The Importance of Difficulty in Nakamoto consensus.
To understand how critical difficulty is to Bitcoin's ecosystem, you need to know how Nakamoto consensus works. For a wide area network with no centralized entity, consensus protocols are the only way to maintain any form of governance. Traditional consensus algorithms like Raft are not ideal for maintaining a wide-area cryptoeconomic protocol. This is why Satoshi Nakamoto, the creator of Bitcoin, came up with Nakamoto consensus. The central tenet of the Nakamoto consensus is that to participate in the system, one must pay a price. In the case of proof-of-work (POW), i.e., Bitcoin's consensus, miners pay a price with "work." Work, in this case, is the heavy amount of computational energy that a miner must spend to mine one Bitcoin. This is where difficulty comes in. Difficulty is the metric that makes Bitcoin mining hard, plus, this is what Nakamoto consensus leverages to solve the double spending problem.
What is double spending?
Double spending is the reason why all the attempts at creating a decentralized cryptocurrency had failed miserably before Bitcoin. In simple terms, it is a flaw that can allow one Bitcoin to be spent more than once at the same time. We never encountered this issue while dealing with physical cash. After all, if you are buying something with a $10 note, you can't simultaneously purchase something else with that same note, right?
However, a digital token has digital files that can be easily duplicated, leading to inevitable double spending. As you can imagine, double spending can have several devastating effects on the ecosystem's economy:
Firstly, it inflates the total supply of the coins within the ecosystem, which throws the supply-demand equation out of control. Secondly, if anyone, anywhere can spend the same coin without restriction, it will reduce the people's faith in the sanctity of that currency.


Bitcoin

Bitcoin requires all the transactions to be included in the blockchain, without fail. This makes sure that anyone in the network can trace every single Bitcoin right to its very source. Such a high level of transparency ensures no one will be able to double spend without the entire network noticing. However, let's think of something more diabolical. Suppose, someone decides to hijack the blockchain by forking out and try to double spend all the Bitcoins.
What happens then?
Well, it turns out that due to network difficulty, the amount of resources and money that the attacker will need to take over the chain will be exponential. As such, it will simply not be economically worth it for them to act against the interests of the system. This is how network difficulty gives Nakamoto Consensus the firepower it needs to maintain network security and integrity.
Conclusion - Bitcoin mining Difficulty.
We hope that you found a lot of value in this article. If you have some doubts, then feel free to reach out to us at any time.
What is Bitcoin mining Difficulty.
This problem can be simplified for explanation purposes: The hash of a block must start with a certain number of zeros. The probability of calculating a hash that starts with many zeros is very low, therefore many attempts must be made. In order to generate a new hash each round, a nonce is incremented. This is based on the hashcash function.
The Bitcoin network difficulty is the measure of how difficult it is to find a new block compared to the easiest it can ever be. It is recalculated every 2016 blocks to a value such that the previous 2016 blocks would have been generated in exactly two weeks had everyone been mining at this difficulty. This will yield, on average, one block every ten minutes.

Bitcoin

What is Mining Difficulty?
Mining difficulty or just "difficulty" is a measure or a network-wide setting that indicates how much effort is required by miners to find a proof-of-work.
In Bitcoin, a proof-of-work is just a piece of data - or more precisely a number - which falls below a predetermined difficulty target that is continually and automatically readjusted by the Bitcoin protocol.
For miners competing in the Bitcoin network, finding or generating this number involves repeatedly hashing the header of the block until the hashing algorithm spits out an output that falls below the aforementioned pre-set difficulty target.
But why do miners do that in the first place?
Miners expend computational energy and compete to find the proof-of-work because finding the proof-of-work is the only way to validate blocks, and validating blocks is how miners in the Bitcoin network make their living.
The first miner to validate a block gets to create a unique transaction, called a coinbase transaction, whereby the miner rewards himself with a set amount of newly minted bitcoins.
How Do Miners Find Proof-of-Work?
The process of hashing is, in fact, quite simple but requires an enormous amount of computational energy.
Put simply, hashing is the transformation of a string of characters (the input) into a usually shorter, fixed-length value or key (the output) that represents the original string.
The trick with hashing is that, while running the same input through the same hashing algorithm always gets us the same output, changing only the smallest bit of the input and running it through the same algorithm changes the output completely.
In order to find the proof-of-work, miners must repeatedly change the input (which is consisted of the block header - the part that stays the same - and a random number called a nonce - which is the variable that miners change to get a different output) and run it through the SHA256 cryptographic algorithm until they find a hash that meets the preset difficulty target.
Using sophisticated mining hardware called ASICs (Application-Specific Integrated Circuits), miners can make hundreds of thousands of these calculations per second.
It takes the entire network of miners roughly 10 minutes to find and validate a new block of transactions.
Why Is Difficulty Important?
The moving or self-readjusting difficulty target is a crucial component of Bitcoin security for several reasons, but mainly because it ensures the network's neutrality by preventing any single miner from taking full control over the protocol.
The ever-changing difficulty target ensures that the Bitcoin protocol runs smoothly and that a new block is validated and added to the Bitcoin blockchain roughly every 10 minutes on average. This 10-minute interval between blocks is better known as block time.
Difficulty matters for more than just protocol security. Maintaining a stable block time has substantial monetary implications. If miners start mining blocks faster, they'll generate bitcoins faster, which in turn translates into a higher inflation rate.
Maintaining a low, fixed and predictable inflation rate is essential for a scarce digital asset such as Bitcoin.
How Does Bitcoin Difficulty Change?
In order to keep the block time fixed as more miners join and/or leave the network, the Bitcoin protocol must keep pace and continually readjust the mining difficulty accordingly.
The average block time of the Bitcoin network is evaluated every 2106 blocks (roughly every two weeks); if the block time is greater than 10 minutes, then the difficulty will be reduced, and if it's less than 10 minutes, the difficulty level will be increased.
In other words, if the cumulative hash power of the network rises, the Bitcoin protocol will readjust and make it harder for miners to find the proof-of-work. And, conversely, if the cumulative hash power drops, the difficulty will drop to make it easier for miners to validate blocks and keep the interlude between each new block and the previous one fixed at.
It's important to note that not every cryptocurrency in existence is designed with the same block time in mind. Ethereum, for example, aims for an average block time of 20 seconds, while Litecoin aims for a block time of 2.5 minutes.
You may be wondering: "How does the Bitcoin blockchain know if block times have been longer or shorter than ten minutes on average? Wouldn't this require an oracle to keep track of block times?"
Good question. The way the blockchain "knows" how much time the average block has taken during this difficulty period is by referencing timestamps left by the miners of each block. To some extent, there are protocol rules in place that prevent a miner from lying about the timestamp. If you want to know more, you can read this guide from Bitmex's blog.
How Does Difficulty Affect Miners?
Difficulty directly impacts miner profitability. Difficulty adjustments make it easier or harder for active miners to find new blocks and earn bitcoins.
Greater difficulty means that miners need more hashing power to secure the same chance of winning a block reward. Since in today's world nearly all individual miners join mining pools, greater difficulty means that miners will earn fewer bitcoins per unit of hash power contributed to the mining pool or per unit of electricity consumed.
Usually, when the Bitcoin network experiences a drop in mining difficulty, that means that the price of bitcoin was too low and the most inefficient miners couldn't cover their operating costs and had to stop mining.
If you are interested in mining, make sure to check out our mining profitablity calculator before you get started.
When inefficient miners shut their mining rigs off, the efficient miners that survive get to experience greater profit margins -- but only for a short period of time. In free markets with relatively low barriers to entry, high margins tend to attract competition.
In that way, the Bitcoin protocol - through the moving difficulty target - acts as a self-stabilizing ecosystem.
Higher margins attract more miners. More miners results in greater difficulty. Greater difficulty means lower margins. Lower margins translate into greater sell pressure for inefficient miners. The selling pressure then further lowers the price by increasing the bitcoin supply while the demand (presumably) stays the same.
This then leads to miner capitulation and a drop in difficulty, which then means higher margins for the efficient miners, which again attracts more miner competition and we arrive back where we started.
Another aspect of the mining business that affects profiit is taxes. Every miner needs to know the relevant tax laws for Bitcoin mining in his part of the world, which is why it is so important to use a crypto tax software when calculating profits.
Is There a Maximum Difficulty?
Yes, but getting to the maximum difficulty is practically impossible.
The maximum difficulty is a ridiculously huge number (about 2^224), which quite literally means that to mine a block with this difficulty would require all the energy in the universe.
Understanding how difficulty fits into the Bitcoin blockchain is crucial to understanding how Bitcoin secures its transactions.
Difficulty adjustments keep Bitcoin blocks consistent (for the most part) and their reliablity over the past 10 years is impressive.
Historical Difficulty Adjustments.
Below you can see all the difficulty adjustments since the beginning of Bitcoin.
Height Difficulty Change Average Block 641,088 16,847,561,611,550 - 16.85 T - 2.87 % 10 min 18 s 639,072 17,345,948,872,516 - 17.35 T + 9.89 % 09 min 07 s 637,056 15,784,217,546,288 - 15.78 T 0.00 % 10 min 01 s 635,040 15,784,744,305,477 - 15.78 T + 14.95 % 08 min 42 s 633,024 13,732,352,106,018 - 13.73 T - 9.29 % 11 min 01 s 631,008 15,138,043,247,082 - 15.14 T - 6.00 % 10 min 39 s 628,992 16,104,807,485,529 - 16.10 T + 0.92 % 09 min 55 s 626,976 15,958,652,328,578 - 15.96 T + 8.45 % 09 min 14 s 624,960 14,715,214,060,656 - 14.72 T + 5.77 % 09 min 28 s 622,944 13,912,524,048,945 - 13.91 T - 15.95 % 11 min 54 s 620,928 16,552,923,967,337 - 16.55 T + 6.88 % 09 min 22 s 618,912 15,486,913,440,292 - 15.49 T - 0.38 % 10 min 02 s 616,896 15,546,745,765,529 - 15.55 T + 0.52 % 09 min 57 s 614,880 15,466,098,935,554 - 15.47 T + 4.67 % 09 min 33 s 612,864 14,776,367,535,688 - 14.78 T + 7.08 % 09 min 20 s 610,848 13,798,783,827,516 - 13.80 T + 6.57 % 09 min 24 s 608,832 12,948,593,420,946 - 12.95 T + 0.56 % 09 min 57 s 606,816 12,876,842,089,682 - 12.88 T - 0.74 % 10 min 05 s 604,800 12,973,235,968,799 - 12.97 T + 1.99 % 09 min 49 s 602,784 12,720,005,267,390 - 12.72 T - 7.10 % 10 min 46 s 600,768 13,691,480,038,694 - 13.69 T + 5.25 % 09 min 31 s 598,752 13,008,091,666,971 - 13.01 T + 1.95 % 09 min 49 s 596,736 12,759,819,404,408 - 12.76 T + 7.31 % 09 min 20 s 594,720 11,890,594,958,795 - 11.89 T + 10.38 % 09 min 04 s 592,704 10,771,996,663,680 - 10.77 T + 5.78 % 09 min 27 s 590,688 10,183,488,432,890 - 10.18 T + 1.98 % 09 min 49 s 588,672 9,985,348,008,059 - 9.99 T + 10.78 % 09 min 02 s 586,656 9,013,786,945,891 - 9.01 T - 0.56 % 10 min 04 s 584,640 9,064,159,826,491 - 9.06 T + 14.23 % 08 min 46 s 582,624 7,934,713,219,630 - 7.93 T + 7.09 % 09 min 21 s 580,608 7,409,399,249,090 - 7.41 T - 0.67 % 10 min 04 s 578,592 7,459,680,720,542 - 7.46 T + 11.26 % 09 min 00 s 576,576 6,704,632,680,587 - 6.70 T + 0.04 % 10 min 00 s 574,560 6,702,169,884,349 - 6.70 T + 5.50 % 09 min 29 s 572,544 6,353,030,562,983 - 6.35 T - 0.63 % 10 min 04 s 570,528 6,393,023,717,201 - 6.39 T + 0.22 % 09 min 59 s 568,512 6,379,265,451,411 - 6.38 T + 5.11 % 09 min 31 s 566,496 6,068,891,541,676 - 6.07 T - 0.05 % 10 min 00 s 564,480 6,071,846,049,920 - 6.07 T + 0.17 % 09 min 59 s 562,464 6,061,518,831,027 - 6.06 T + 4.25 % 09 min 36 s 560,448 5,814,661,935,891 - 5.81 T - 1.18 % 10 min 08 s 558,432 5,883,988,430,955 - 5.88 T + 4.72 % 09 min 33 s 556,416 5,618,595,848,853 - 5.62 T + 10.03 % 09 min 06 s 554,400 5,106,422,924,659 - 5.11 T - 9.56 % 11 min 03 s 552,384 5,646,403,851,534 - 5.65 T - 15.13 % 11 min 47 s 550,368 6,653,303,141,405 - 6.65 T - 7.39 % 10 min 48 s 548,352 7,184,404,942,701 - 7.18 T + 0.02 % 10 min 00 s 546,336 7,182,852,313,938 - 7.18 T - 3.65 % 10 min 23 s 544,320 7,454,968,648,263 - 7.45 T + 4.23 % 09 min 36 s 542,304 7,152,633,351,906 - 7.15 T + 1.90 % 09 min 49 s 540,288 7,019,199,231,177 - 7.02 T + 4.34 % 09 min 36 s 538,272 6,727,225,469,722 - 6.73 T + 5.29 % 09 min 30 s 536,256 6,389,316,883,511 - 6.39 T + 7.39 % 09 min 20 s 534,240 5,949,437,371,609 - 5.95 T + 14.88 % 08 min 42 s 532,224 5,178,671,069,072 - 5.18 T - 3.45 % 10 min 22 s 530,208 5,363,678,461,481 - 5.36 T + 5.64 % 09 min 28 s 528,192 5,077,499,034,879 - 5.08 T + 2.77 % 09 min 44 s 526,176 4,940,704,885,521 - 4.94 T + 14.71 % 08 min 43 s 524,160 4,306,949,573,981 - 4.31 T + 3.94 % 09 min 38 s 522,144 4,143,878,474,754 - 4.14 T + 3.03 % 09 min 43 s 520,128 4,022,059,196,164 - 4.02 T + 4.76 % 09 min 33 s 518,112 3,839,316,899,029 - 3.84 T + 9.35 % 09 min 09 s 516,096 3,511,060,552,899 - 3.51 T + 1.40 % 09 min 52 s 514,080 3,462,542,391,191 - 3.46 T + 5.23 % 09 min 30 s 512,064 3,290,605,988,755 - 3.29 T + 9.42 % 09 min 10 s 510,048 3,007,383,866,429 - 3.01 T + 4.62 % 09 min 34 s 508,032 2,874,674,234,415 - 2.87 T + 10.43 % 09 min 03 s 506,016 2,603,077,300,218 - 2.60 T + 16.84 % 08 min 34 s 504,000 2,227,847,638,503 - 2.23 T + 15.36 % 08 min 40 s 501,984 1,931,136,454,487 - 1.93 T + 3.10 % 09 min 42 s 499,968 1,873,105,475,221 - 1.87 T + 17.74 % 08 min 30 s 497,952 1,590,896,927,258 - 1.59 T + 18.11 % 08 min 28 s 495,936 1,347,001,430,558 - 1.35 T - 1.28 % 10 min 08 s 493,920 1,364,422,081,125 - 1.36 T - 6.09 % 10 min 40 s 491,904 1,452,839,779,145 - 1.45 T + 21.39 % 08 min 14 s 489,888 1,196,792,694,098 - 1.20 T + 6.49 % 09 min 24 s 487,872 1,123,863,285,132 - 1.12 T + 1.85 % 09 min 49 s 485,856 1,103,400,932,964 - 1.10 T + 19.58 % 08 min 22 s 483,840 922,724,699,725 - 922.72 G + 3.89 % 09 min 38 s 481,824 888,171,856,257 - 888.17 G - 3.80 % 10 min 24 s 479,808 923,233,068,448 - 923.23 G + 7.32 % 09 min 20 s 477,792 860,221,984,436 - 860.22 G + 6.92 % 09 min 21 s 475,776 804,525,194,568 - 804.53 G + 13.53 % 08 min 49 s 473,760 708,659,466,230 - 708.66 G - 0.43 % 10 min 03 s 471,744 711,697,198,173 - 711.70 G + 4.85 % 09 min 33 s 469,728 678,760,110,082 - 678.76 G + 13.90 % 08 min 47 s 467,712 595,921,917,085 - 595.92 G + 6.42 % 09 min 24 s 465,696 559,970,892,890 - 559.97 G + 7.28 % 09 min 20 s 463,680 521,974,519,553 - 521.97 G + 0.22 % 09 min 59 s 461,664 520,808,749,422 - 520.81 G + 4.24 % 09 min 36 s 459,648 499,635,929,816 - 499.64 G + 5.03 % 09 min 32 s 457,632 475,705,205,061 - 475.71 G + 3.24 % 09 min 41 s 455,616 460,769,358,090 - 460.77 G + 4.54 % 09 min 34 s 453,600 440,779,902,286 - 440.78 G + 4.41 % 09 min 35 s 451,584 422,170,566,883 - 422.17 G + 7.43 % 09 min 19 s 449,568 392,963,262,344 - 392.96 G + 16.64 % 08 min 35 s 447,552 336,899,932,795 - 336.90 G + 6.05 % 09 min 26 s 445,536 317,688,400,354 - 317.69 G + 2.43 % 09 min 46 s 443,520 310,153,855,703 - 310.15 G + 8.16 % 09 min 15 s 441,504 286,765,766,820 - 286.77 G + 1.76 % 09 min 50 s 439,488 281,800,917,193 - 281.80 G + 10.68 % 09 min 02 s 437,472 254,620,187,304 - 254.62 G + 0.40 % 09 min 58 s 435,456 253,618,246,641 - 253.62 G - 1.90 % 10 min 13 s 433,440 258,522,748,404 - 258.52 G + 7.17 % 09 min 20 s 431,424 241,227,200,229 - 241.23 G + 6.82 % 09 min 22 s 429,408 225,832,872,179 - 225.83 G + 2.30 % 09 min 47 s 427,392 220,755,908,330 - 220.76 G + 1.56 % 09 min 51 s 425,376 217,375,482,757 - 217.38 G + 7.67 % 09 min 17 s 423,360 201,893,210,853 - 201.89 G - 5.43 % 10 min 35 s 421,344 213,492,501,107 - 213.49 G + 0.04 % 10 min 00 s 419,328 213,398,925,331 - 213.40 G + 1.88 % 09 min 49 s 417,312 209,453,158,595 - 209.45 G + 6.83 % 09 min 22 s 415,296 196,061,423,939 - 196.06 G - 1.63 % 10 min 10 s 413,280 199,312,067,531 - 199.31 G + 2.60 % 09 min 45 s 411,264 194,254,820,283 - 194.25 G + 8.73 % 09 min 12 s 409,248 178,659,257,772 - 178.66 G - 0.01 % 10 min 00 s 407,232 178,678,307,671 - 178.68 G + 7.09 % 09 min 20 s 405,216 166,851,513,282 - 166.85 G + 0.82 % 09 min 55 s 403,200 165,496,835,118 - 165.50 G + 4.46 % 09 min 34 s 401,184 158,427,203,767 - 158.43 G - 3.10 % 10 min 19 s 399,168 163,491,654,908 - 163.49 G + 13.44 % 08 min 49 s 397,152 144,116,447,847 - 144.12 G + 20.06 % 08 min 20 s 395,136 120,033,340,651 - 120.03 G + 5.89 % 09 min 27 s 393,120 113,354,299,801 - 113.35 G + 9.12 % 09 min 10 s 391,104 103,880,340,815 - 103.88 G + 11.16 % 09 min 00 s 389,088 93,448,670,796 - 93.45 G + 18.14 % 08 min 28 s 387,072 79,102,380,900 - 79.10 G + 8.77 % 09 min 12 s 385,056 72,722,780,642 - 72.72 G + 10.44 % 09 min 04 s 383,040 65,848,255,179 - 65.85 G + 5.77 % 09 min 27 s 381,024 62,253,982,449 - 62.25 G + 2.25 % 09 min 47 s 379,008 60,883,825,480 - 60.88 G + 0.12 % 09 min 59 s 376,992 60,813,224,039 - 60.81 G + 2.49 % 09 min 46 s 374,976 59,335,351,233 - 59.34 G + 4.17 % 09 min 36 s 372,960 56,957,648,455 - 56.96 G + 4.98 % 09 min 32 s 370,944 54,256,630,327 - 54.26 G + 2.95 % 09 min 43 s 368,928 52,699,842,409 - 52.70 G + 0.81 % 09 min 56 s 366,912 52,278,304,845 - 52.28 G + 2.35 % 09 min 46 s 364,896 51,076,366,303 - 51.08 G + 3.39 % 09 min 41 s 362,880 49,402,014,931 - 49.40 G - 0.58 % 10 min 04 s 360,864 49,692,386,354 - 49.69 G + 4.42 % 09 min 35 s 358,848 47,589,591,153 - 47.59 G - 2.50 % 10 min 15 s 356,832 48,807,487,244 - 48.81 G + 2.44 % 09 min 46 s 354,816 47,643,398,017 - 47.64 G + 0.07 % 10 min 00 s 352,800 47,610,564,513 - 47.61 G - 3.71 % 10 min 23 s 350,784 49,446,390,688 - 49.45 G + 5.84 % 09 min 27 s 348,768 46,717,549,644 - 46.72 G - 1.50 % 10 min 09 s 346,752 47,427,554,950 - 47.43 G + 1.59 % 09 min 51 s 344,736 46,684,376,316 - 46.68 G + 5.01 % 09 min 32 s 342,720 44,455,415,962 - 44.46 G + 7.71 % 09 min 17 s 340,704 41,272,873,894 - 41.27 G - 6.14 % 10 min 39 s 338,688 43,971,662,056 - 43.97 G + 8.20 % 09 min 15 s 336,672 40,640,955,016 - 40.64 G + 3.00 % 09 min 43 s 334,656 39,457,671,307 - 39.46 G - 1.37 % 10 min 09 s 332,640 40,007,470,271 - 40.01 G - 0.73 % 10 min 04 s 330,624 40,300,030,327 - 40.30 G + 1.76 % 09 min 51 s 328,608 39,603,666,252 - 39.60 G + 10.05 % 09 min 05 s 326,592 35,985,640,265 - 35.99 G + 2.81 % 09 min 44 s 324,576 35,002,482,026 - 35.00 G + 0.98 % 09 min 54 s 322,560 34,661,425,923 - 34.66 G + 16.20 % 08 min 36 s 320,544 29,829,733,124 - 29.83 G + 8.75 % 09 min 11 s 318,528 27,428,630,902 - 27.43 G + 15.03 % 08 min 42 s 316,512 23,844,670,038 - 23.84 G + 20.86 % 08 min 17 s 314,496 19,729,645,940 - 19.73 G + 5.30 % 09 min 30 s 312,480 18,736,441,558 - 18.74 G + 8.08 % 09 min 15 s 310,464 17,336,316,978 - 17.34 G + 3.08 % 09 min 44 s 308,448 16,818,461,371 - 16.82 G + 24.93 % 08 min 00 s 306,432 13,462,580,114 - 13.46 G + 14.51 % 08 min 44 s 304,416 11,756,551,916 - 11.76 G + 12.44 % 08 min 54 s 302,400 10,455,720,138 - 10.46 G + 18.10 % 08 min 28 s 300,384 8,853,416,309 - 8.85 G + 10.66 % 09 min 02 s 298,368 8,000,872,135 - 8.00 G + 14.64 % 08 min 44 s 296,352 6,978,842,649 - 6.98 G + 14.04 % 08 min 46 s 294,336 6,119,726,089 - 6.12 G + 22.23 % 08 min 11 s 292,320 5,006,860,589 - 5.01 G + 17.80 % 08 min 29 s 290,304 4,250,217,919 - 4.25 G + 11.39 % 08 min 59 s 288,288 3,815,723,798 - 3.82 G + 21.92 % 08 min 12 s 286,272 3,129,573,174 - 3.13 G + 19.39 % 08 min 23 s 284,256 2,621,404,453 - 2.62 G + 19.49 % 08 min 23 s 282,240 2,193,847,870 - 2.19 G + 22.59 % 08 min 10 s 280,224 1,789,546,951 - 1.79 G + 26.16 % 07 min 56 s 278,208 1,418,481,395 - 1.42 G + 20.12 % 08 min 20 s 276,192 1,180,923,195 - 1.18 G + 30.01 % 07 min 43 s 274,176 908,350,862 - 908.35 M + 28.41 % 07 min 47 s 272,160 707,408,283 - 707.41 M + 16.07 % 08 min 37 s 270,144 609,482,679 - 609.48 M + 19.29 % 08 min 25 s 268,128 510,929,738 - 510.93 M + 30.70 % 07 min 40 s 266,112 390,928,787 - 390.93 M + 46.02 % 06 min 51 s 264,096 267,731,249 - 267.73 M + 41.45 % 07 min 04 s 262,080 189,281,249 - 189.28 M + 27.19 % 07 min 52 s 260,064 148,819,199 - 148.82 M + 32.13 % 07 min 34 s 258,048 112,628,548 - 112.63 M + 29.56 % 07 min 43 s 256,032 86,933,017 - 86.93 M + 32.22 % 07 min 34 s 254,016 65,750,060 - 65.75 M + 29.40 % 07 min 44 s 252,000 50,810,339 - 50.81 M + 35.88 % 07 min 22 s 249,984 37,392,766 - 37.39 M + 19.63 % 08 min 22 s 247,968 31,256,960 - 31.26 M + 19.47 % 08 min 23 s 245,952 26,162,875 - 26.16 M + 22.63 % 08 min 09 s 243,936 21,335,329 - 21.34 M + 10.32 % 09 min 04 s 241,920 19,339,258 - 19.34 M + 23.92 % 08 min 04 s 239,904 15,605,632 - 15.61 M + 28.41 % 07 min 48 s 237,888 12,153,411 - 12.15 M + 8.64 % 09 min 12 s 235,872 11,187,257 - 11.19 M + 11.03 % 09 min 01 s 233,856 10,076,292 - 10.08 M + 12.28 % 08 min 55 s 231,840 8,974,296 - 8.97 M + 16.96 % 08 min 33 s 229,824 7,672,999 - 7.67 M + 14.59 % 08 min 44 s 227,808 6,695,826 - 6.70 M + 38.13 % 07 min 15 s 225,792 4,847,647 - 4.85 M + 10.98 % 09 min 01 s 223,776 4,367,876 - 4.37 M + 19.63 % 08 min 22 s 221,760 3,651,011 - 3.65 M + 11.47 % 08 min 58 s 219,744 3,275,464 - 3.28 M + 10.33 % 09 min 04 s 217,728 2,968,775 - 2.97 M - 8.64 % 10 min 57 s 215,712 3,249,549 - 3.25 M + 9.06 % 09 min 11 s 213,696 2,979,636 - 2.98 M - 11.59 % 11 min 19 s 211,680 3,370,181 - 3.37 M - 2.00 % 10 min 12 s 209,664 3,438,908 - 3.44 M + 2.08 % 09 min 48 s 207,648 3,368,767 - 3.37 M + 1.95 % 09 min 49 s 205,632 3,304,356 - 3.30 M + 7.55 % 09 min 20 s 203,616 3,072,321 - 3.07 M + 0.58 % 09 min 56 s 201,600 3,054,627 - 3.05 M + 6.65 % 09 min 22 s 199,584 2,864,140 - 2.86 M + 6.31 % 09 min 24 s 197,568 2,694,047 - 2.69 M + 10.38 % 09 min 04 s 195,552 2,440,642 - 2.44 M + 11.40 % 08 min 59 s 193,536 2,190,865 - 2.19 M + 7.57 % 09 min 18 s 191,520 2,036,671 - 2.04 M + 9.12 % 09 min 11 s 189,504 1,866,391 - 1.87 M + 6.56 % 09 min 23 s 187,488 1,751,454 - 1.75 M + 1.44 % 09 min 52 s 185,472 1,726,566 - 1.73 M + 9.06 % 09 min 10 s 183,456 1,583,177 - 1.58 M - 0.50 % 10 min 03 s 181,440 1,591,074 - 1.59 M - 8.20 % 10 min 54 s 179,424 1,733,207 - 1.73 M + 14.89 % 08 min 42 s 177,408 1,508,589 - 1.51 M - 4.39 % 10 min 28 s 175,392 1,577,913 - 1.58 M - 2.99 % 10 min 19 s 173,376 1,626,553 - 1.63 M + 8.56 % 09 min 13 s 171,360 1,498,294 - 1.50 M + 0.09 % 10 min 00 s 169,344 1,496,978 - 1.50 M + 8.77 % 09 min 12 s 167,328 1,376,302 - 1.38 M - 0.24 % 10 min 02 s 165,312 1,379,647 - 1.38 M + 5.50 % 09 min 29 s 163,296 1,307,728 - 1.31 M + 4.55 % 09 min 34 s 161,280 1,250,757 - 1.25 M + 7.83 % 09 min 17 s 159,264 1,159,929 - 1.16 M + 0.42 % 09 min 58 s 157,248 1,155,038 - 1.16 M + 5.90 % 09 min 27 s 155,232 1,090,715 - 1.09 M - 8.54 % 10 min 56 s 153,216 1,192,497 - 1.19 M - 0.91 % 10 min 06 s 151,200 1,203,461 - 1.20 M - 18.03 % 12 min 12 s 149,184 1,468,195 - 1.47 M - 13.09 % 11 min 31 s 147,168 1,689,334 - 1.69 M - 3.76 % 10 min 24 s 145,152 1,755,425 - 1.76 M - 1.26 % 10 min 08 s 143,136 1,777,774 - 1.78 M - 1.55 % 10 min 10 s 141,120 1,805,700 - 1.81 M - 4.40 % 10 min 28 s 139,104 1,888,786 - 1.89 M + 11.70 % 08 min 57 s 137,088 1,690,895 - 1.69 M + 8.18 % 09 min 15 s 135,072 1,563,027 - 1.56 M + 13.33 % 08 min 50 s 133,056 1,379,192 - 1.38 M + 57.27 % 06 min 22 s 131,040 876,954 - 876.95 K + 54.59 % 06 min 28 s 129,024 567,269 - 567.27 K + 30.44 % 07 min 40 s 127,008 434,877 - 434.88 K + 78.15 % 05 min 37 s 124,992 244,112 - 244.11 K + 55.07 % 06 min 27 s 122,976 157,416 - 157.42 K + 43.54 % 06 min 59 s 120,960 109,670 - 109.67 K + 18.76 % 08 min 25 s 118,944 92,347 - 92.35 K + 12.15 % 08 min 55 s 116,928 82,345 - 82.35 K + 19.38 % 08 min 23 s 114,912 68,977 - 68.98 K - 9.47 % 11 min 03 s 112,896 76,192 - 76.19 K + 37.06 % 07 min 18 s 110,880 55,589 - 55.59 K + 52.47 % 06 min 34 s 108,864 36,459 - 36.46 K + 40.24 % 07 min 09 s 106,848 25,997 - 26.00 K + 18.10 % 08 min 28 s 104,832 22,012 - 22.01 K + 19.39 % 08 min 23 s 102,816 18,437 - 18.44 K + 13.06 % 08 min 51 s 100,800 16,307 - 16.31 K + 12.59 % 08 min 53 s 98,784 14,484 - 14.48 K + 18.23 % 08 min 28 s 96,768 12,251 - 12.25 K + 51.66 % 06 min 36 s 94,752 8,078 - 8.08 K + 17.65 % 08 min 31 s 92,736 6,866 - 6.87 K + 51.37 % 06 min 37 s 90,720 4,536 - 4.54 K + 46.75 % 06 min 50 s 88,704 3,091 - 3.09 K + 43.83 % 06 min 57 s 86,688 2,149 - 2.15 K + 55.95 % 06 min 25 s 84,672 1,378 - 1.38 K + 4.55 % 09 min 34 s 82,656 1,318 - 1.32 K + 43.73 % 06 min 58 s 80,640 917 - 917.00 + 28.79 % 07 min 46 s 78,624 712 - 712.00 + 14.29 % 08 min 45 s 76,608 623 - 623.00 + 21.92 % 08 min 13 s 74,592 511 - 511.00 + 45.17 % 06 min 53 s 72,576 352 - 352.00 + 44.26 % 06 min 56 s 70,560 244 - 244.00 + 34.81 % 07 min 27 s 68,544 181 - 181.00 + 302.22 % 02 min 24 s 66,528 45 - 45.00 + 95.65 % 05 min 11 s 64,512 23 - 23.00 + 21.05 % 08 min 16 s 62,496 19 - 19.00 + 11.76 % 08 min 58 s 60,480 17 - 17.00 + 6.25 % 09 min 34 s 58,464 16 - 16.00 + 45.45 % 07 min 08 s 56,448 11 - 11.00 - 8.33 % 10 min 51 s 54,432 12 - 12.00 + 9.09 % 08 min 56 s 52,416 11 - 11.00 + 57.14 % 06 min 49 s 50,400 7 - 7.00 + 16.67 % 07 min 47 s 48,384 6 - 6.00 + 50.00 % 07 min 30 s 46,368 4 - 4.00 0.00 % 09 min 56 s 44,352 4 - 4.00 + 33.33 % 08 min 21 s 42,336 3 - 3.00 + 50.00 % 06 min 41 s 40,320 2 - 2.00 + 100.00 % 07 min 12 s 38,304 1 - 1.00 0.00 % 07 min 24 s 36,288 1 - 1.00 0.00 % 09 min 43 s 34,272 1 - 1.00 0.00 % 09 min 04 s 32,256 1 - 1.00 0.00 % 08 min 28 s 30,240 1 - 1.00 0.00 % 14 min 39 s 28,224 1 - 1.00 0.00 % 19 min 29 s 26,208 1 - 1.00 0.00 % 21 min 04 s 24,192 1 - 1.00 0.00 % 19 min 43 s 22,176 1 - 1.00 0.00 % 29 min 40 s 20,160 1 - 1.00 0.00 % 20 min 05 s 18,144 1 - 1.00 0.00 % 19 min 08 s 16,128 1 - 1.00 0.00 % 13 min 33 s 14,112 1 - 1.00 0.00 % 12 min 24 s 12,096 1 - 1.00 0.00 % 12 min 46 s 10,080 1 - 1.00 0.00 % 12 min 47 s 8,064 1 - 1.00 0.00 % 12 min 45 s 6,048 1 - 1.00 0.00 % 12 min 24 s 4,032 1 - 1.00 0.00 % 11 min 36 s 2,016 1 - 1.00 0.00 % 17 min 00 s.


Bitcoin

Is Bitcoin Legal?
Bitcoin, the world's first decentralized digital currency, is attracting attention across the globe. When acknowledging that it is also the first borderless, apolitical form of money in history, it's hard to avoid the topic of whether it can be used legally.
It's worth noting that no matter who says you can't use bitcoin, its decentralized nature ensures that nobody can actually stop you from using it. As a broad answer, bitcoin can be used anywhere with equal access to the network, as long as you have access to the internet and in some areas, just electricity, thanks to new satellite systems.
Still, this has not stopped countries from trying to restrict the use of bitcoin within their borders. Some countries have made bitcoin entirely illegal, like India, Bolivia and Ecuador. Some of these same countries have also issued their own digital currencies as well. Other countries, like China, have shifted their view on bitcoin, banning and unbanning the currency in various ways over the last few years. As of October 2018, China has restricted digital currencies to private use only, prohibiting all financial institutions from handling any digital currency transactions at all.
The problem with banning something like bitcoin (which cannot be easily censored) from a geographic region is that trying to enforce such a ban is very difficult to do. The most restrictions can do is try to dissuade people from using it by threatening them with some sort of consequences, but they cannot actually prevent people from using it, due to bitcoin's decentral.
But, by and large, it is legal to send, receive, mine and generally use bitcoin in most countries around the world.ized protocol.
Is Bitcoin Legal Tender?
Legal tender is defined as money that must be accepted as payment for a debt in the jurisdiction where the payment is being made. Because bitcoin is not recognized as legal tender by any government, it can only be used as payment if both parties in a transaction agree to its use as a form of payment.
New technologies are often misrepresented and misunderstood, as the internet itself was in the early days. Some first world countries, like the United States, Canada, and most of Europe, have taken a "wait and see" approach to bitcoin by not outright banning it, but they are slow to regulate it as a legitimate financial technology.
The gray line in these legal classifications is what bitcoin is considered. Regulatory bodies all over the world have each given bitcoin its own legal classification based on what they believe it is. The problem arises when each regulatory body has their own viewpoint on what classification the digital currency falls under.
In the United States, for example, the Treasury classifies bitcoin as a "virtual currency." The Commodity Futures Trading Commission (CFTC) classifies bitcoin as a commodity, and the Internal Revenue Service classifies bitcoin as property.
All of these organizations have their reasons for classifying the digital currency the way they do, but the fact that it is classified differently so many times goes to show one thing: nobody is ready to agree on a definition of exactly what bitcoin is.
The Legal Status of Bitcoins in the U.S. and Elsewhere.
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As of February 2020, Bitcoin was legal in the U.S., Japan, the U.K., Canada, and most other developed countries. In the emerging markets, the legal status of Bitcoin still varied dramatically. China heavily restricted Bitcoin without actually criminalizing the holding of bitcoins. India banned banks from dealing in bitcoins and left the overall legal status of cryptocurrencies unclear. In general, it is necessary to look at Bitcoin laws in specific countries.
Even where Bitcoin is legal, most of the laws that apply to other assets also apply to Bitcoin. Tax laws are the area where most people are likely to run into trouble. For tax purposes, bitcoins are usually treated as property rather than currency. Bitcoin is generally not considered legal tender.
As of February 2020, Bitcoin was legal in the U.S., Japan, the U.K., Canada, and most other developed countries. In general, it is necessary to look at Bitcoin laws in specific countries. In the U.S., the IRS has taken an increasing interest in Bitcoin and issued guidelines for taxpayers. Bitcoin has serious flaws for those seeking anonymity, so illegal activity is moving to other cryptocurrencies.
IRS Guidance for U.S. Taxpayers.
In the United States, the IRS has taken an increasing interest in Bitcoin and issued guidelines. In 2014, the agency issued IRS Notice 2014-21 to provide information on the tax treatment of virtual currencies. Virtual currency is the term that the IRS uses for cryptocurrency.   In 2020, the IRS created a new tax form requiring taxpayers to declare if they engaged in any virtual currency transactions during 2019.  
Other Legal and Regulatory Issues.
Bitcoin exists in a deregulated marketplace, so there is no centralized issuing authority. Bitcoin addresses do not require Social Security Numbers (SSNs) or other personal information like standard bank accounts in the United States. That initially raised concerns about the use of bitcoins for illegal activity.
In its early years, the perceived anonymity of Bitcoin led to many illegal uses. Drug traffickers were known to use it, with the best-known example being the Silk Road market. It was a section of the so-called dark web where users could buy illicit drugs. All transactions on the Silk Road used bitcoins. It was eventually shut down by the FBI in October 2013.
However, Bitcoin has several serious flaws for those seeking anonymity. In particular, Bitcoin creates a permanent public record of all transactions. Once an individual is linked to an address, that person can be connected to other transactions using that address. Competing cryptocurrencies, such as Monero and Zcash, now provide much better privacy protection. Given this situation, illegal activity is moving away from Bitcoin.
Defining Bitcoin.
The digital currency known as Bitcoin was created in 2009 by a person or organization using the alias Satoshi Nakamoto. The real identity of Satoshi Nakamoto has never been established. There are no physical bitcoins that correspond with dollar bills and euro notes. They exist only on the Internet, usually in digital wallets. Ledgers known as blockchains are used to keep track of the existence of bitcoin. It can be given directly to or received from anyone who has a bitcoin address via peer-to-peer transactions. Bitcoin also trades on various exchanges around the world, which is how its price is established.
Bitcoin can be transferred from one country to another without limitation. However, the exchange rate against government-backed currencies can be very volatile. That is partly because speculation often drives the price, but also because bitcoins have a relatively small market compared to traditional currencies.