As the prices of cryptocurrencies, particularly Bitcoin, have skyrocketed in recent years, Earnity’s industry experts, Domenic Carosa and Dan Schatt, believe it is understandable that more and more people are finding interest in mining. However, most people do not see Bitcoin mining as a viable option due to its complexity and high costs. Here are some fundamentals you must know if you wish to start your crypto business:
What is Bitcoin Mining?
Bitcoin mining is creating new bitcoins and putting them into circulation. It is also how the network confirms recent transactions, and it is an integral part of the blockchain ledger’s upkeep and development. Miners use sophisticated hardware that solves very complex computational math problems. The first to solve the problem receives the next block of bitcoins, and the process restarts.
How to Mine Bitcoins: Here’s What You Need
Individuals were once able to compete for blocks with a standard at-home personal computer. But unfortunately, you can no longer rely on regular computers if you wish to mine bitcoin because the mining difficulty varies over time.
The Bitcoin network aims to produce one block every 10 minutes to ensure that the blockchain runs smoothly and can process and verify transactions. However, if 1 million mining rigs compete to solve the hash problem, they will likely arrive at a solution faster than if ten mining rigs work on the same problem. As a result, Bitcoin evaluates and adjusts the mining difficulty every 2,016 blocks, or roughly every two weeks.
When more computing power is collectively at work to mine for bitcoins, the mining difficulty increases to maintain a stable block production rate. When computing power decreases, the difficulty level decreases. So, a personal computer mining for bitcoin will almost certainly find nothing at today’s network size.
Domenic Carosa and Dan Schatt from Earnity believe miners must now invest in powerful computer equipment such as a graphics processing unit or, more realistically, an application-specific integrated circuit (ASIC) to mine competitively.
Today, almost all Bitcoin mining hardware consists of ASIC machines, which in this case, do one thing and one thing only: mine bitcoins. Thanks to these supercomputers, today’s miners can generate nearly 200 TH/s while using only 27.5 joules per terahash.