As Bitcoin is becoming increasingly popular, like every other product out there, Bitcoin has its own range of massive supporters and massive critics. Bitcoin is an online or virtual cryptocurrency, that is recognized in some countries around the world, and among a lot of computer users. It is argued that since there is no central body governing the flow of this currency, some argue that it could turn out being a big hoax.
Bitcoin is also not the only cryptocurrency on the market. The market these days is soaring with hundreds of new currencies, there are 1512 active cryptocurrencies according to coinmarketcap.com but like we mentioned how there is no central body governing these coins, there is also no possible way to keep track exactly how many coins or cryptocurrency currently float the market.
Another reason why Bitcoin is not trusted in many circles is that no one really knows who started Bitcoin and cannot track who it dates back to. So there could be any single day when Bitcoin could crash or be closed down just for the sake of it, and everyone would eventually lose all their investments. Without a centralised body to overlook Bitcoin trading and flow, it has also become a major target for schemes and frauds.
With the limited number of Bitcoins available on the market and the huge demand for it globally that has increased significantly in the past 12-months, Bitcoin has become a rare commodity. The only way more Bitcoin can only enter the market through a process known as mining. Mining is a process where you use computational power, these days using ASIC mining hardware, to hash complex algorithms and confirm all the transactions which are taking place on the network. Miners are rewarded with Bitcoin when they solve a block of transactions, every 10 minutes.
This process requires a huge amount of hardware technology and massive electricity to complete the process. Mining also needs high processing powers, which means big and expensive specialized computers which contain ASIC mining chips. So, to provide a solution to people who want to mine coins, some companies let you rent server space at a fixed rate. This way you can mine coins and avoid the huge bulk load of computer expenditure. But like anything that is too good to be true, these companies aren’t always willing to help you like they offer.
Shady Cloud mining companies may offer you lifetime contracts or a fixed amount of money and amazing return on investments. However, mining difficulty levels keep increasing. This means, that for the same fixed amount of money, now your return will start decreasing every time. While the companies know of this, they will never inform you beforehand to avoid any misunderstandings.
Other’s may also be running complete Ponzi schemes. They may claim to bring bigger and better returns than what most companies do, but won’t be very transparent about their processes. Your money may even end up in the wrong hands without you realising before its too late. This is why its extremely important to check everything and understand the main concepts that are linked to mining, before investing in the wrong places and incurring losses. Recently one of the biggest Ponzi’s in cryptocurrencies history is said to have collapsed.