Howdy Ags,
I would like to preface each post that I write with a reference to the “About the Author” page so that you know a little about me, and why I am writing this. So please check it out if you haven’t already.
What is bitcoin and how can I make money with bitcoin?
Thats a great question, and Google Answers it pretty broadly.
My Bitcoin Explanation:
Bitcoin is a crypto currency, and a crypto currency is a coin that exists only in computer’s memory and on a public global ledger which all computers have access too. This allows people to send coins to each other, make transactions, just like cash exchanges people’s hands.
Well, who holds and keeps the global ledger up to date, and checks validity of a transaction?
There are computers that dedicate themselves to supporting the transactions of the ledger, these computers are called miners. They facilitate transactions from one person’s account or “wallet” to another person’s account or “wallet.” This is where the money is made.
How much money can I make?
You can make money by dedicating your computer to mining for the public ledger and acting as a server. How much you can make is determined by how fast your computer is. This Calculator is good at estimating your returns based on the current network hash rate and how fast your computer is.
Now how the system works as a whole is to be continued at a later date, because that is a complicated subject and you should have a basic understanding of network, and distributed systems, and how 1-way hashing algorithms work.
Example Home Made Mining Rigs
These are examples of home made mining rigs. They don’t have to be nearly this big, but the larger the machinery the more income you can make.
If you want to get involved with the whole mining area but don’t want to touch the hardware yourself, then you can buy hashing power from a mining company, and it does all the work and pays you back similar to how a bond works.
You should do research on your own to determine if the rates are something you want to work with, and if you are ok with the volatility of the bitcoin market. You have to be very careful when buying mining power from a company because there are pyramid scheme sites out there. The most reputable site for mining bitcoin is Genesis Mining. I bought some hashing about a year ago, and it has been working for me ever since.