With my limited knowledge of Bitcoin and cryptocurrency,, as I understand it,,the Bitcoin mining involves using computer technology to solve different mathematical problems. ,,
And when you have solved the mathematical problems to the satisfaction of the powers that be, your reward is that you have earned Bitcoin. , you are paid in Bitcoin for doing this work.
Anyone with greater knowledge please educate all of us in more detail.
But all of this depends on people recognizing Bitcoin to be a medium of exchange or store of value. If you are earning money in the form of Bitcoin which you can then spend to buy goods and services, I suppose that all makes sense in the world of crypto.
“And when you have solved the mathematical problems to the satisfaction of the powers that be, your reward is that you have earned Bitcoin. , you are paid in Bitcoin for doing this work.”
The “powers that be” actually are the market of buyers and sellers of Bitcoin, and yes the “miners” that run the cryptocurrency server operations for the cryptocurrency transations get paid in Bitcoin when they succcessfully navigate the Bitcoin buying and selling operations (just as banks, brokers and invstment operations get paid in fess for negotiating and handling ivestment buying and selling transactions), but the real money - gain or losses in Bitcoin accrue to the buyers and sellers, not the miners, although the “mining” operations are themselves a lucrative business, as are “wall street” operations.
You mean like: "If a train leaves Chicago at 2 PM heading for New York traveling at 75 MPH, and 23 minutes later another train leaves New York heading for Chicago....."
“But all of this depends on people recognizing Bitcoin to be a medium of exchange or store of value.”
It has been an incredible “store of value”.
The first recorded transaction was 10000 bitcoin for a $41 pizza in 2010. Today those 10000 bitcoins are worth around $600,000,000!
https://www.forbes.com/advisor/investing/cryptocurrency/bitcoin-price-history/
But that is the main reason why bitcoin will never be a real life currency. Because of it’s finite numbers, people would rather hoard it than spend it to buy stuff. Today, hardly anyone uses bitcoins to buy stuff. And as things stand it’ll most likely continue to appreciate.
In order for bitcoin to be a viable currency, its numbers should be allowed to increase by around 3% a year.
It’s the level of money supply growth that a growing economy needs according to Milton Friedman.
https://www.investopedia.com/terms/k/k-percent-rule.asp
“...Bitcoin mining involves using computer technology to solve different mathematical problems. ,,”
Are these useful problems which needed to be solved, or just some busy work like spinning a Tibetan prayer wheel?