How to Mine Bitcoin

Since the arrival of cryptocurrency, we’ve witnessed many new terms with new meanings. One of those terms is Bitcoin mining. Of course, Bitcoin is the pioneer and king of cryptocurrencies. So, your understanding of cryptocurrency should start from here. If you are not into crypto technology, you deserve no blame for asking people to explain Bitcoin mining to you. The most valid explanation of Bitcoin mining is that it is the process through which people create valid blocks that add transaction records to the public ledger of Bitcoin or BTC. The main reason why this has to happen before any Bitcoin gets into circulation is that it eliminates the problem of ‘double spend’.

How Does Bitcoin Mining Work

You are also not wrong if you ask the question, how does Bitcoin mining work? That is because it is a complicated process, meant for the initiated only. The main reason for mining is to arrive at a consensus on the history of transactions in the public ledger. The only way to prove the ownership of Bitcoin is through public-key cryptography, which is currently impenetrable. However, this alone may not guarantee that a coin has not been mined or sent to another owner. The history of transactions must be accessible to all in a public place. For this to be possible, the ordering method must be universally accepted by all involved. This ordering detail must include the exact time of the creation of each transaction.

Now, these transactions are lodged in boxes locked with a digital padlock named blockchains. Your work as a miner is to run the mining software, solving complex mathematical problems in search of the keys to open these locks. Upon finding a key first, you open a box, and the transaction gets verified. The system rewards you with newly generated BTCs and some transaction fees on your proof of work.

How to Start Bitcoin Mining

To start Bitcoin mining, you have to set up a mine. So, what is a Bitcoin mine? Well, it is an environment or a space set up with Bitcoin mining tools, and where Bitcoin is mined. The necessary tools include the Application-Specific Integrated Circuit device, which is also known as a rig, internet service, the electricity to power it, and a wallet to collect the mined BTC. When you have these, you should log into your chosen mining platform and start mining. If you understand how to mine Bitcoin, then you have learned how to mine Bitcoin cash too.

The Number of Bitcoin

Number of Bitcoin in Existence

It is common for people to throw the question, how many Bitcoin have been mined? The latest data about this as of August 2021 says 18.77 million Bitcoin. The next question that usually follows this is, how many Bitcoin are left to mine? You have to deduct the number of total Bitcoin created from the number already mined. With this, the number of Bitcoin left to be mined as of August 2021 is 2.3 million. That is because Satoshi Nakamoto created only 21 million Bitcoin.

I’ve also heard questions like, how many Bitcoin are mined in a day? The answer to this is 900. It takes 10 minutes to mine a block, so 144 blocks are mined every day. Consider this alongside the latest Bitcoin halving, and you will have 900 BTC out there for rewards every day.

Some also ask how long it takes to mine a Bitcoin. To arrive at this, we look at the fact that you can only mine a block of Bitcoin every 10 minutes. However, the number of BTC in every block changes with time. That makes it difficult to arrive at. With the arrival of Bitcoin, a block contained 50 BTC. With the halving after every 210,000 blocks, the number of BTCs per block reduced to 25. So, you will arrive at the length of time it takes to mine a Bitcoin by considering the number of BTC per block at the given time, and dividing it by the 10 minutes that it takes to birth a block.

The Future Number of Bitcoin

The future number of Bitcoin is 21 million, as the developer made it. The only thing that will change is the price of each coin. This will now determine the worth of each BTC. Consider issues of the block rewards and halving against the number of Bitcoin left to be mined. With this, 2140 is the projected year the entire BTC would be mined.

What Do We Need To Mine Bitcoin

Equipment

In the past, people mined with their CPUs. However, the slow pace of such devices and the power consumption volume affects our environment negatively. So, they are phasing out now. The best equipment right now is the Application-Specific Integrated Circuit device, which you can abbreviate as ASIC. These are very efficient mining equipment that their introduction in 2013 relegated the CPUs to the background.

Now, the best graphic card for mining BTCs in the CPUs, AMD7970, delivered 800 million hashes per second. However, the ASICs of today produce up to 100 trillion hashes per second. The difference is up to 125,000 folds. That is why everybody is going for the ASICs. You will also need a reliable and fast internet connection to access the mining platforms, and a wallet to collect the Bitcoin.

Is Bitcoin Mining Legal?

You will get the question, is Bitcoin mining legal, from beginners often. The answer to this is that it is legal in some jurisdictions or countries and illegal in some others. To the question, is Bitcoin mining worth it, the answer is an emphatic yes.

People gain a lot from mining Bitcoin. If you are not gaining from the transaction fees you earn from winning new batches of coins, you gain from the BTC allocated to you. You may consider the cost of the equipment and the fossil fuel. However, the fact that the price of Bitcoin keeps skyrocketing means that even if you don’t see the profit now, you will gain a lot in the future.

Energy Access

The price of electricity matters a lot in Bitcoin mining. In most countries, the price of electricity ranges between $0.15 and $0.25 per kilowatt-hour. Many people doubt the possibility of Bitcoin mining maintaining profitability with this type of bill. That is why professional miners usually choose areas with very cheap electricity. Some places with the most affordable electricity for miners are Irkutsk in Russia, Sichuan in China, Iceland, and some parts of Canada and the United States. If you get a price below $0.06 per kWh, it’s low enough to generate profits even when the market is down.

You may also have to treat the question, how does Bitcoin mining use fossil fuels? To find the virtual key to unlock the digital padlock used on the blockchains, you have to make up to 25 trillion attempts. Information from the University of Cambridge reveals that this process currently consumes 13.81 gigawatts of electricity every year. That is used to power the ASICs for Bitcoin mining.

Is Bitcoin Mining Still Profitable

The profitability of Bitcoin mining now

Is Bitcoin mining profitable? This is a question you may have heard on several occasions. However, the answer is that Bitcoin mining is still as profitable as ever. 6.25BTC was the reward for a newly minted Bitcoin block as of May 2020. Check the market value of 1 BTC, and you will see a huge profit no matter what it costs to mine. Also, remember that the miners earn transaction fees in dollars for each hash.

Bitcoin Mining Future Outlook

To the question, when will all Bitcoin be mined, there is a simple answer. Following how long it takes to mine a block, the number of BTC in one block, and the halving tradition, the remaining 2.3 million BTC will be mined by 2140.

Another question we need to answer is, what happens when all Bitcoins are mined? When Bitcoin supply reaches its cap, there will be a change in the incentives to people involved in the Bitcoin ecosystem. Transaction fees will become more important for miners than block rewards for revenue generation. There may also be a transformation of the crypto ecosystem. It is a new ecosystem, so we may not be 100% sure of what will happen to it in the future.

 

Q&A

Can Quantum Computing Crack Bitcoin

Most systems that rely on cryptography are vulnerable to quantum computers. However, there are no quantum computers out there yet.

Have There Been Incidences of Bitcoin Hacking In The Past

Since the inception of Bitcoin, the cryptography and protocol rules are still effective. That shows that the Bitcoin concept has a solid design.

What Do I Need To Start Mining

All you need is a CPU or an ASICS, constant electricity, internet supply, and a Bitcoin wallet.

Is Bitcoin A Ponzi Scheme

Ponzi schemes pay returns to investors from investors’ money instead of profits earned through the business. But Bitcoin is a free software project, and there is no central authority.