Fr. Robert Ballecer breaks down the basics of cryptocurrency.
One of the most confusing concepts within Bitcoin on the whole, is the
process of mining. The explanations to "what is bitcoin mining" often
given on the news and in the media, is that bitcoin mining is the
solving of complex mathematical problems. While this is the way that
bitcoin mining works, it is not the purpose of bitcoin mining.
The purpose of bitcoin mining is threefold
1. Bitcoin mining is the processing of transactions
2. Bitcoin mining is a fair way to distribute new bitcoin wealth
3. Bitcoin mining secures the bitcoin network.
As
of today it costs approximately $1000 in electricity, and $1000 in
hardware, to mine a single block for a reward of 25 bitcoins. It is
estimated that within 12 months, these figures will increase 10 fold.
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