What Numeric Problem?<\/h2>\n
The whole essence behind Bitcoin mining is answering a numeric problem. But what kind of a problem are we talking about?<\/p>\n
Fortunately, you don\u2019t have to have advanced mathematical experience to solve such a problem. There\u2019s a common misconception that miners are trying to solve complex mathematical problems. Actually, a miner is trying to be the first one to come up with a hexadecimal number of 64 digits. This number is referred to as a \u201chash.\u201d The whole solution to the numeric problem is guesswork rather than complexity.<\/p>\n
The bad news here is that the number of guesses is in the trillions. To find the solution to the 64-digit number quickly, you need a ton of computing power \u2013 a high \u201chash rate.\u201d This hash rate is measured in MH\/s (mega hashes per second), GH\/s (giga hashes per second), and TH\/s (tera hashes per second). The more hashes per second you have, the better your chances are of successfully \u201cmining\u201d Bitcoin.<\/p>\n
Mining Impacts Bitcoin Circulation<\/h2>\n
The most important purpose of Bitcoin mining is to support the entire Bitcoin ecosystem. However, there is another important purpose that Bitcoin mining fulfils\u2013mining is the only way to increase the global supply of Bitcoin. When mining, you are actually \u201cminting\u201d Bitcoin.<\/p>\n
Satoshi Nakamoto created the first-ever block of Bitcoin. Every block after that was minted by miners.<\/p>\n
But what does this have to do with Bitcoin\u2019s supply? Well, there\u2019s a supply cap for Bitcoin of 21 million. As of the end of 2020, there is 18.5 million Bitcoin out there. So, you\u2019d imagine that getting to 21 million would be a matter of a few years. However, the rate of mined Bitcoin is reduced over time, meaning that the final Bitcoin won\u2019t be mined before the year 2140.<\/p>\n
How Much Can You Expect to Earn?<\/h2>\n
Back in 2009, when Bitcoin became a thing, each successfully mined block would earn you 50 BTC. This might be a whopping amount of money today, but 50 BTC had almost no value back then.<\/p>\n
Approximately every four years, Bitcoin halving occurs, where the reward of successfully mining one block of Bitcoin is, quite literally, halved. In 2012, after the first halving, the mining reward was reduced from 50 BTC to 25 BTC. Then, in 2016, it was halved to 12.5 BTC, and, as of May, 2020, the reward for mining a block of Bitcoin is 6.25 BTC. No one can pinpoint the date of the next halving, but it is expected to occur in 2024.<\/p>\n
As the price of Bitcoin grows, mining becomes increasingly lucrative. For instance, at the current price of Bitcoin (around $55,000), the mining reward is almost $350,000 in Bitcoin. This is quite a whopping amount. The halving will lower the mining reward to 3.125 BTC, but if the Bitcoin price keeps soaring, this could mean one million dollars in 2024.<\/p>\n
Why Isn\u2019t Everyone Mining?<\/h2>\n
You don\u2019t have to sit at your computer trying to guess the hexadecimal hash on your own. Advanced graphics cards are used for mining, for the extra processing power. So, why isn\u2019t everyone doing it?<\/p>\n
Well, first of all, the equipment that you\u2019d need for mining takes quite a bit of an investment. Secondly, it also means significant power usage, to the point of simply not paying off. We\u2019re talking about various coolers and multiple rigs. Not to mention that mining is getting increasingly difficult as time passes.<\/p>\n
A successful Bitcoin mining operation takes a lot of calculation and planning.<\/p>\n
Bitcoin Mining 101<\/h2>\n
We hope that we\u2019ve given you more insight into the world of Bitcoin mining. As you can see, the Bitcoin blockchain wouldn\u2019t work without miners. They are necessary for powering the Bitcoin transactions and bringing more Bitcoin into the supply.<\/p>\n
Still, you can\u2019t just jump into the world of Bitcoin mining. You have to carefully calculate whether or not it\u2019s something that will pay off in the end. We\u2019re talking about a significant, power-consuming investment here.<\/p>\n
![](\"https:\/\/usethebitcoin.com\/wp-content\/uploads\/2021\/03\/Screen-Shot-2021-03-23-at-18.15.29-265x300.png\")
<\/p>\n