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Cryptocurrency. How does it work, and is it worth it?

Since+bitcoin%27s+crash%2C+people+are+struggling+to+regain+the+profits+they+lost.
Since bitcoin's crash, people are struggling to regain the profits they lost.

Since bitcoin's crash, people are struggling to regain the profits they lost.

Since bitcoin's crash, people are struggling to regain the profits they lost.

Steven Shin, Reporter

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Cryptocurrency has taken this world by storm recently with the rise of bitcoin, which has prompted people from all around to try their hand at cryptocurrency “mining.” Cryptocurrencies such as bitcoin, lightcoin, and dogecoin (yes that is a real thing) have been around for a very long time, but they were initially only mined by enthusiasts. However, as bitcoin began to rise absurdly in value, more and more people began to desire a cut of that sweet digital cash.

Unlike traditional currencies, cryptocurrency runs the risk of allowing people to exploit and spend the same money more than once. This problem is solved by making every transaction public and leaving the “miners” to verify the transactions. These miners are basically paid for being the first to verify different transactions. While the computations required to verify transactions aren’t very difficult for the modern computer, it is the “first” part of the equation that creates competition. For this reason, bitcoin miners spend time building the best computer for mining taking into account the upfront cost, the resale value of computer parts, and the potential income generated from mining.

This depends on a variety of factors. If you already have a powerful desktop or you are willing to do research and spend money on various parts (and you don’t mind contributing to the already heavily inflated GPU prices), cryptocurrency mining may be a worthwhile hobby – just don’t expect to earn an entire bitcoin right off the bat. However, for more general users with PCs that aren’t well maintained and laptops, it may not be the best investment since these machines could be harmed by cryptocurrency mining.

The biggest issue that can lead PC components (or even the entire PC) to their death is heat. Apart from the degradation of computer parts that comes from placing them under constant stress, mining causes computers to heat up considerably due to the heavy power requirements. Overheating can cause various components to fail, which can shorten their lifespan significantly.

Aside from the potentially harmful effects of mining, it is becoming increasingly difficult to turn a profit due to large enterprises hopping onto the cryptocurrency bandwagon. Because of these large corporations, the hardware demands for efficient bitcoin mining has increased, and it is difficult to construct a profitable mining rig for under a thousand dollars.

At the moment, the future of cryptocurrency is unknown. Many are saying the success of bitcoin will help decide the fate of the variety of other cryptocurrencies in existence. Others just want the prices of graphics cards to finally return to where they were. However, cryptocurrencies will likely stay relevant for a little while longer, at least.

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Cryptocurrency. How does it work, and is it worth it?