Update: CNBC Segment Perfectly Explains Bitcoin Mining and Profitability
publication date: Jan 17, 2018
Update: Check out how ugly things are getting out there in the crypto world - look at these catastrophic declines over the past seven days:
Perhaps unwittingly, this CNBC segment nearly perfectly explains how Bitcoin works. "Miners" such as this one in rural Washington state, invest in specialized computer equipment to solve complex mathematical equations around the clock and "earn" Bitcoins through this mindless and made up process.
Miners, of course, choose to locate in areas with lower electricity costs. So, when an "investor" today decides to fork over around $14,000 for one Bitcoin, they are buying from miners like this one. The miners are making hefty profits. Guess who's going to lose money in the long run?
In related news, South Korea is in the process of banning cryptocurrency trading while China is in the process of banning both trading and mining.
If you haven't yet done so, please read my overview piece on Bitcoin and other cryptocurrencies.