Bitcoin is the first of the cryptocurrencies to open a new financial era in the world. Despite this, BTC mining is still in demand. Most of the mining equipment is purchased specifically for bitcoin mining, and it consumes enormous volumes of electricity. How long will it take to consume electricity to earn one BTC?
Bitcoin — What Is It About?
Bitcoin is a cryptocurrency founded by Satoshi Nakamoto. The initial objective was to ensure the anonymity of payments on the Internet. And this task has been fulfilled 100%, which marked the beginning of the lightning-fast development of cryptocurrencies.
Cryptocurrency does not exist in the form of a tangible medium, each BTC is a blockchain stored online. A key, a complex cipher of letters and numbers, opens access to it. The key is created using a complex algorithm.
There are public and private keys. With a private key, the owner of the funds gets access to their assets, while a public key is used to transfer funds to a third party. When funds are transferred, the transaction is mapped in a blockchain. The process of creating a new blockchain is called mining.
What Is Mining?
Mining is the only way to issue new cryptocurrency units. A miner who creates a new blockchain is rewarded for the resources invested. A blockchain is a chain of blocks, each block is a certain amount of information. In the case of BTC, it is 1 Mb. As soon as a miner creates this single block, the latter is included in the overall turnover and having created a new unit, the miner receives remuneration. Currently, such remuneration amounts to 6.5 BTC, which is easy to be calculated in US dollars knowing the exchange rate – we are talking about quite big amounts of money.
The bitcoin issuing speed at the moment is 1 block per 10 minutes, i.e. every 10 minutes the whole bitcoin volume in the network is increased by 6.5 units. Consequently, 144 blocks are mined daily and users receive 900 bitcoins.
However, this does not mean that it takes only 10 minutes to mine one block. So, how much time is actually required? This is a very important question given the power consumption of the mining process, not to mention the cost of the equipment. Before you sign up for this business, you should estimate objectively the prospects of return on investment.
If before there were few people willing to mine a new block, now the situation has drastically changed: thousands of people are competing for the prize in the amount of 6.5 BTC but only one will get it. That is, the chances of each participant in the process are slim. Moreover, it is safe to say that a single miner has almost no chance to mine bitcoin now. This forces miners to join together in communities, so-called pools. By pooling their efforts and processing power, the pool members increase their chances of mining success many times but the remuneration is also distributed between all of the participants in accordance with their participation in the pool.
It is impossible to say exactly how long it will take to mine a single block. We can only say that it is possible to increase one’s share in the reward by “investing” in the most powerful equipment. This encourages users to increase the cumulative capacity of the pool serving a common goal.
Complexity of Mining
If previously it was possible to get a Bitocin with an ordinary home PC, now the situation has fundamentally changed. The reason for this is the complexity of the tasks that need to be solved to add a new block. This complexity is also not a constant value. The general principle is as follows: the system tends to add one block every 10 minutes. If this time increases on average, the complexity decreases, and vice versa.
Complexity is not adjusted instantly but over a period of time-based on analyzing the average time of adding a block. This is usually done automatically every two weeks.
The original Bitcoin principle implied the possibility of mining for every PC owner. However, the idea soon had to be abandoned – mining with standard CPU-based equipment finally became ineffective. The use of powerful graphics cards also failed to correct the situation in the long run. Today, mining requires the use of special solutions.
A good option is an ASIC-based solution. This is an application-specific integrated circuit, in our case, this purpose is to solve problems according to the mining algorithm. The disadvantage of such a machine is its advantage, which is focused specialization. The price of such ASIC-based equipment can exceed 10,000 dollars, at the same time the hardware is not able to solve any other task except mining. That said, even the use of specialized mining machines does not guarantee success.
Mining Alone or Join a Pool
Although most Bitcoin miners operate as part of mining pools, there is still often a question of how promising it is to mine BTC alone. After all, in this case, you do not have to share your remuneration with anyone and pay commission fees to the pool for the withdrawal of funds.
So, let’s calculate. To get one BTC per day, the processing power of the equipment must be not less than 0.11% of the total network. Currently, this is approximately 149.2 PH/s. To understand, such processing power is provided by more than 2,300 Antminer S17e mining machines. Knowing the cost of one such machine, it is easy to calculate how much you need to invest in order to mine one block in 6.5 days, which is about 1 BTC per day.
But that does not mean that even after spending that kind of money, you will be guaranteed to earn a BTC per day because a more powerful machine (a single miner’s machine or a mining pool) can solve the problem before you do. This brings into doubt the feasibility of the idea of mining alone – the higher potential rewards do not outweigh the level of risk.
Mining together as part of a pool, while having disadvantages in the form of profit sharing and commissions, still provides a better chance of getting paid regularly.
How Much Can I Really Earn in a Day?
As noted, the Bitcoin network is configured to issue one block or 6.5 BTC every 10 minutes. Thus, the cumulative amount of BTC increases by more than 900 units every day. However, it should be kept in mind that many thousands of users are competing for this amount, only one of those will be rewarded per block.
This reduces the prospects of individual mining to almost zero. Most BTC miners now operate in pools distributing profit in proportion to each participant’s contribution to the pool’s overall performance.
The more powerful equipment a pool member uses, the larger share of the premium he or she can claim, and the faster is the mining.
What are the costs of mining per BTC?
To answer this question, it is a good idea to consider a number of factors:
- electricity tariffs in the region (for example, the cost per kilowatt of electricity in the U.S. is several times higher than in Mexico);
- the equipment used;
- pool commission.
How many BTC can be mined in a day?
The Bitcoin network grows by 144 blocks per day (one block in 10 minutes). Considering that a block is rewarded with 6.5 Bitcoins, about 900 BTC can be mined per day, however, it must be kept in mind that these funds are distributed among thousands of miners.
Due to the hype surrounding Bitcoin, the competition is at its highest level. It is practically impossible to achieve results on your own, even with the purchase of a costly mining machine based on a specialized integrated circuit. Pooling also does not guarantee earnings. Bitcoin mining today requires high investments and an equally high level of knowledge.