Bitcoin mining is the process of adding new transactions to the Bitcoin blockchain. Itβs a tough job. People who choose to mine Bitcoin use a process called proof of work, deploying computers in a race to solve mathematical puzzles that verify transactions.To entice miners to keep racing to solve the puzzles and support the overall system, the Bitcoin code rewards miners with new Bitcoins. βThis is how new coins are createdβ and new transactions are added to the blockchain, says Okoro.
How to Invest in Bitcoin?
Like a stock, you can buy and hold Bitcoin as an investment. You can even now do so in special retirement accounts called Bitcoin IRAs. No matter where you choose to hold your Bitcoin, peopleβs philosophies on how to invest it vary: Some buy and hold long term, some buy and aim to sell after a price rally, and others bet on its price decreasing. Bitcoinβs price over time has experienced big price swings, going as low as $5,165 and as high as $28,990 in 2020 alone. βI think in some places, people might be using Bitcoin to pay for things, but the truth is that itβs an asset that looks like itβs going to be increasing in value relatively quickly for some time,β Marquez says. βSo why would you sell something thatβs going to be worth so much more next year than it is today? The majority of people that hold it are long-term investors.β
