While browsing through some news articles, I came across a story of PayPal allowing the use of bitcoins. This really grabbed my attention because they are THE online payment processing company. Around the same time I noticed a story about how Dell is now accepting Bitcoins. I thought about bitcoins and came to realize I never really knew how bitcoins worked. The company I work for is a Dell partner as well so, who knows, maybe we’ll begin accepting them at some point. I never used or dealt with bitcoins before and I thought that it is was time to change this. I got curious…. I did some quick Googling and soon had myself an online wallet on Blockchain.info.
Now that I had my wallet, I set out to get some bitcoins. Basically, you can buy them, trade for them, or better yet, mine them on your own for “free”. I checked the price for a bitcoin and as of this article, one bitcoin is going for $463. Once I saw this, I set out to start mining them for my own.
I soon realized I did not have the necessary processing power for this. Mining for bitcoins has become very resource intensive over the years and its currently not practical for most individuals to try on their own. This is by design in order to limit the number of bitcoins in circulation. It’s setup this way because you are rewarded with bitcoins when you solve a block. A block is a list of bitcoin transactions. Think of it a digital ledger. Miners help verify transactions and keep the bitcoin network running.
At first, it was easy to mine using only your CPU. but soon everyone started to use GPU’s from their graphic cards due to them being better suited for mining. Once mining reached its limit with GPU’s users began using specialized hardware and also began pooling their hardware mining resources.
I decided to join bitcoin mining pools on Bitminter.com and Eclipse Mining Consortium. Using the BitMinter Client program, I was able to mint only a paltry .0000031 bitcoins. Mind you, this was after leaving my computer on for 24hrs and overclocking my graphics card almost to the point of overheating so that it could mine faster. And with pooling, you are only entitled a fraction of mined bitcoins because you must split it with others in your pool.
If you take into account electricity usage and the wear and tear on my computer, it isn’t really worth it for me to mine for coins. I was disappointed in this, but I’m happy to have a better understanding of this technology because it seems digital currency is here to stay and is gaining in popularity.
Below are links to the two stories I mentioned above. Any…I hope you enjoyed my story of dabbling in bitcoins.