If you’ve been around the crypto realm for a while, you’ve surely come across the term Bitcoin mining. While an appealing practice, there are some factors to consider before you go and buy your first mining rig, including how much Bitcoin you can mine in a day.
Bitcoin mining, for some, is a painfully expensive task, or an appealing way to make profits by creating new bitcoins. Either way, this article will explain common questions, such as how much Bitcoin one can expect to bing in per day while mining, how expensive is it, and how does BTC mining work in depth.
That being said, how much BTC can you mine in a day, and how difficult is it? We’ll explore these questions and more below.
How Much Bitcoin Can You Mine in a Day?
Technically, you could mine as much as 900 Bitcoins per day taking into account the cryptocurrency’s current inflation rate. Bitcoin’s inflation rates halves every four year in a process known as the halving. That is, however, a limit that isn’t available to any miner, as it’s the total amount entering circulation every 24 hours.
Firstly, mining Bitcoin solo is an extremely difficult and expensive task; the computational power you’d need to mine a block in 10 minutes (which is the average BTC transaction time) translates to around 3000 mining rigs. Let’s break it down:
- Today, the average market price of an S19 miner, one of the most popular (and relatively accessible) mining machines, is around $3,000.
- An S19 has a hashrate of 110 TH/s —with a power draw of 3250W.
- The hashrate, the parameter that determines the computer power required to mine 1 BTC, is currently at 323.22 EH/s, and one exahash = 1 quintillion
- TH/s is one trillion hashes per second, therefore to reach 323.22, you would need around 3000 mining rigs, which could cost around $10 million.
Note that difficulty rates are adjusted automatically every two weeks.
Moreover, not only is it extremely expensive to mine 1 BTC per day —you’re also competing against a network of miners. We’re talking about tens of thousands of computers discovering a block every ten minutes. This is where BTC mining pools come into play.
Joining a BTC Mining Pool
Bitcoin mining pools are an alternative option to mine BTC. Instead of buying millions of dollars worth of mining equipment, you’d pay a commission fee (around 1% – 5%) to join the pool and collaborate with other miners.
BTC mining pools refer to a joint group of network computers who share processing power to mine a new block on the Bitcoin blockchain. No matter which miner discovers a new block, the rewards are distributed between the participants, who must share a proof of work to receive their respective percentage.
Joining a BTC mining pool with a single mining rig is still difficult; even pools with over thousands of mining rigs take one to two weeks to mine a block. Either way, joining a pool is considerably cheaper and can help you generate an extra income in the long-term.
Note that you receive rewards proportional to the amount of hashrate power, e.g., 1% of hashrate grants you 1% of block rewards.
Currently, Foundry USA is the leading BTC mining pool with 33.3% of the total hashrate. This means the pool is responsible for mining 299.7 BTC of the 900 mined per day.
Understanding Bitcoin Mining
Bitcoin mining refers to the process of creating and validating new blocks in the blockchain, which ultimately results in the production of new bitcoins in circulation. This process is carried out by a global network of computers that solve mathematical puzzles.
The bigger the computer network, the more secure the network is since they can deter tampering from malicious actors. The computer, called miner, acts as a node that follows a set of rules to successfully validate blocks and keep the network running.
Also read: What Is XBT? Does It Differ From Bitcoin’s BTC Ticker?
Likewise, the miners that solve the math quiz are rewarded with a fixed amount of BTC, which is 6.25 BTC per block —but this will decrease with the next halving, scheduled for 2024. However, while the BTC supply is expected to sit below the max supply of 21 million due to BTC’s fractional system expressed in Satoshis, if the supply reaches that number, it’d cut miners fees, forcing miners to only earn transaction fees.
Closing Thoughts: Is it Profitable to Mine Bitcoin?
Mining Bitcoin, while a potentially rewarding job, has a fair share of difficulties and risks. Miners with ideal conditions – meaning low energy prices and/or a large amount of hashrate – can still reap a substantial amount of rewards despite the sturdy competition.
It’s important to consider every potential implication of mining Bitcoin before actually acquiring equipment. Bitcoin mining calculators may be helpful in understanding whether such a venture would be worth it.
Some miners, it’s important to add, accept small losses in their operations to help secure the network and to learn more about cryptocurrency.
FAQ
What is Proof of Work?
Proof-of-work (PoW) is a consensus algorithm in which a global network of miners compete to process new Bitcoin blocks into the blockchain. The concept was first applied in the cryptocurrency world at inception, with the creation of Bitcoin in 2009 by mysterious developer Satoshi Nakamoto.
What’s the Difference Between PoW & PoS?
PoW, next to PoS (Proof-of-Stake) are the two most popular consensus algorithms used by cryptocurrency networks. There are a few important differences between the two.
First, a PoW blockchain relies on a network of users providing computational hardware to process transactions. Meanwhile, a PoS blockchain will also rely on a network of individuals who, instead of connecting mining rigs, all have staked a portion of the blockchain’s native cryptocurrency to participate in the validation process. The process is less costly, and less energy-intensive, although not considered as secure as PoW.
Are there other ways to mine Bitcoin?
It’s also possible to take advantage of cloud mining to mine Bitcoin and other digital assets. Cloud mining essentially handles the mining task to a third-party, with the miner simply reaping the rewards generated by the hardware they purchase. Several large players offer cloud mining solutions, including Binance.
Featured image via Unsplash.
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As a seasoned cryptocurrency expert deeply immersed in the intricate world of Bitcoin and blockchain technology, I bring forth a wealth of knowledge to shed light on the nuances of Bitcoin mining, a subject at the core of the crypto realm.
The evidence of my expertise lies in the meticulous analysis of the complex factors involved in Bitcoin mining. I am well-versed in the dynamics of the mining process, the equipment required, market prices, and the challenges faced by individual miners in this highly competitive space.
Now, let's delve into the concepts outlined in the article:
1. Bitcoin Mining and Inflation Rates:
Bitcoin's inflation rates undergo a halving every four years, impacting the amount of Bitcoin entering circulation daily. Presently, the limit is set at approximately 900 Bitcoins per day due to the current inflation rate.
2. Solo Mining Challenges:
Mining Bitcoin solo is an arduous task due to its extreme difficulty and cost. To mine a block in the average transaction time of 10 minutes, you'd need around 3000 mining rigs, each with a significant upfront cost.
3. Mining Rig Specifications:
The article discusses the specifications of the S19 miner, a popular and relatively accessible mining machine. It has a hashrate of 110 TH/s, a power draw of 3250W, and is priced around $3,000. The total computational power required to mine 1 BTC is currently at 323.22 EH/s, necessitating around 3000 mining rigs, which could cost around $10 million.
4. Bitcoin Mining Pools:
Considering the challenges of solo mining, the article introduces the concept of Bitcoin mining pools. These pools involve miners collaborating and sharing processing power to mine new blocks collectively. Joining a pool requires paying a commission fee (around 1% - 5%), and rewards are distributed based on the contributed hashrate.
5. Foundry USA as a Leading Mining Pool:
Foundry USA is highlighted as the leading BTC mining pool, commanding 33.3% of the total hashrate, equivalent to mining 299.7 BTC of the 900 mined per day.
6. Bitcoin Mining Process:
The article explains that Bitcoin mining involves creating and validating new blocks in the blockchain, facilitated by a global network of computers solving mathematical puzzles. Miners, acting as nodes, follow a set of rules to validate blocks and secure the network. Rewards for solving puzzles are currently set at 6.25 BTC per block.
7. Proof-of-Work (PoW) and Proof-of-Stake (PoS):
The FAQ section clarifies the concept of Proof-of-Work, a consensus algorithm where miners compete to process new Bitcoin blocks. It also briefly differentiates between PoW and PoS, highlighting their key distinctions in terms of computational hardware and energy consumption.
8. Cloud Mining:
The article touches on alternative methods such as cloud mining, where a third-party handles the mining process, and miners receive rewards generated by the purchased hardware.
In conclusion, while Bitcoin mining presents potential rewards, it comes with substantial challenges and risks. A comprehensive understanding of these factors is crucial for anyone considering entering the mining arena.
