Who isn’t familiar with bitcoin anymore? The cryptocurrency has taken the world by storm, especially after the entry of big modules like Elon Musk and Snoop Dogg. However, a very small portion of the world actually realizes how technical and complicated it is to organically mine and transact a BTC. The fastest-growing cryptocurrency, Bitcoin, is mined or created by computer wizards who solve repetitive mathematical complications and puzzles using their smart computers and according to estimates, every 10 minutes, someone sitting in one corner of the world solves the puzzle to be rewarded in turn with a few bitcoins. Every time this takes place, a new puzzle is generated by the system and the process moves in a cycle.
Ideally, the software that generates the world’s most famous cryptocurrency is designed in such a manner that it only allows a user to mine BTC every 10 minutes while solving the puzzle. The difficulty level of the puzzles varies on the number of people trying to solve it at present. Truly a stroke of genius.
Often people wonder how much power it takes to produce one bitcoin. According to the U.S Senate Committee on Energy and Natural Resources, bitcoin mining is subject to 1 per cent of the world’s total energy consumption.
How does the bitcoin mining work?
Now mining is internet lingo for discovering a new bitcoin, similar to mining gold let’s say. For beginners, we’ll make this extra basic for better comprehension.
Assuming you are interested in mining bitcoin and have your own personal computer cable of mining a cryptocurrency. Now “proof of work” is a concept you need to keep in mind while mining cryptocurrency. These are tasks designed to level the playing field for all different miners out there. These tasks will essentially be math problems or equations. Not to confuse it with equations you used to solve in high school, these problems are intense and highly cumbersome.
These equations become tougher as more and more miners join the network. Putting it into perspective, every 10 minutes the equations become more and more difficult requiring the use of better-built machines and computers factoring in several more subtle factors in the mining process.
Once you mine BTC, you can trade on it for free of cost. Investing in bitcoin is different from mining it.
How do you actually mine bitcoin?
As and when the bitcoin algorithm was developed, it set a limit on the number of bitcoins that will ever be generated. 21 million was the magic number. As we speak more than 12 million bitcoins are being circulated while the remaining 9 million are yet to be discovered or mined.
Ever since 2009, the number of bitcoins in circulation has increased and the system comprised of simple and mundane equations, in the beginning, has become harder to break into as we move towards the ‘last’ and ‘forbidden’ 21st BTC.
When is the last BTC expected to mine?
Now the way the system has been set up, puzzles will become increasingly complex and the final bitcoin is expected to be mined in the year 2140. ASIC or Application Specific Integrated Circuit mining computers are becoming increasingly popular among bitcoin miners as they use lesser energy to conduct their calculations. Mining companies have also been set up that run ASIC miners which only goes to show the extent of their popularity in the modern world.
What resources you need for bitcoin mining?
The basics that one might find in a BTC miner’s workspace will include an online bitcoin wallet, an encrypted online bank account – very important as bitcoin is not centralized- and an advanced piece of software. The most popular one is called GUIMiner.
As per data from last year, hackers staged a bitcoin heist in which they managed to steal roughly $1.2 million worth of bitcoins from various sites. None since it is unregulated, once stolen, these bitcoins are lost in a void meaning that they are gone, forever! No amount of recoups will prevent the transaction from going back.
When the GUIMiner is launched, it is programmed to mine bitcoins on its own searching for various multiple combinations that open up a series of padlocked transactions. This program is faster than a miner’s PC and generates more bitcoins effectively. New and faster hardware is also being created for the sole purpose of mining bitcoins. A complete setup will end up costing one around $12,000. A small price to pay for a successful BTC miner.
Even though bitcoin’s exchange rate has been volatile and constantly fluctuating throughout its past, its price has always managed to stay above the cost it incurs to produce one bitcoin.
How long does it take to mine one BTC?
The time required to mine one bitcoin is irrespective of the number of miners and the type of computer you are using to mine. Mining one bitcoin takes 10 minutes and uses 72,000 GW of power.
What is the cost of price of mining one bitcoin or BTC?
The cost of mining 1 BTC involves various factors like power consumption by the device, cost of the computer used for mining, technical services needed.
Keeping all these factors in mind and analyzing them well, you can calculate the profitability rate of mining a BTC. To analyze the profitability before actually mining BTC, you can use various tools available on the internet like CryptoCompare.