Early bitcoin miners are now retiring at ripe old ages of say, 29 or 32 – moving to France or Tuscany…and living the good life.
Without getting into the finer details, with Bitcoin worth $6,500-ish you can imagine that anyone who was interested in crypto-currency technology prior to 2016 with a trading background, probably made some winning plays. For years, proprietary trading firms were booming, making fortunes fueled by high-frequency trading and revolutionizing Wall Street trading. They appeared on the cover of Forbes and were cast as the “bad guys” in movies.
More recently, markets have seen a long period of record-low volatility, and high-frequency trading is no longer sizzling. Some firms are struggling and looking for new ways to deploy their capital. With Bitcoin quadrupling in value this year alone, and other altcoins hitting record highs as well, major players can no longer ignore the new Wild West of trading – even though some insist it is in bubble territory. Proprietary trading firms are particularly well positioned to pursue cryptocurrency trading and are becoming Bitcoin miners because they are in the business of putting their own capital to work. Limitations and fiduciary obligations of Wall Street hedge funds preclude them from getting into cryptocurrency trading, but that is starting to change.
Before the “big fish” get into this pond – OPPORTUNITY ABOUNDS.
Bitcoin Miner Platforms
Certain reputable trading platforms offer advantages, not least of which is Bitcoin miner opportunities. Those wondering where Bitcoin comes from and how it gets into circulation will learn that it gets “mined” into existence. Bitcoin mining serves to both add transactions to the blockchain as well as create new Bitcoin. The mining process involves compiling recent transactions into blocks and trying to solve a complex mathematical puzzle. The first miner who solves the puzzle gets to place the next block on the blockchain and claim the reward – which is new Bitcoin. The rewards incentivize mining and include both the transaction fees (paid to the miner in the form of Bitcoin) as well as the newly created Bitcoin.
The amount of new bitcoin released with each mined block is called the block reward. Since the Bitcoin network is designed to produce a constant amount of Bitcoins every 10 minutes, the difficulty of solving mathematical problems has to increase in order to adjust to the network’s Hash Rate increase. Basically, this means that the more miners that join, the harder it gets to actually mine Bitcoins. Currently, mining is an expensive business and only profitable if you invest a considerable amount of money. However, when pooling resources in a large group – mining can be profitable and all members of the group benefit.
The sharp gains and volatile trading in cryptocurrencies during 2017 have many pondering where trading in digital currencies will go in the future. Fortunately, Bitcoin acceptance hasn’t yet gone mainstream, and most people haven’t yet recognized the scale of opportunity. Those early adopters and bitcoin miners willing to take risks are already benefiting with every indication that trend will continue.