bitcoin mining - overview, benefits, and requirements
Bitcoin mining refers to the process of digitally adding transaction records to the blockchainBlockchainBlockchain networking allows maintenance of a growing list of records. Blockchain authentication is what supports cryptocurrency security., which is a publicly distributed ledger holding the history of every bitcoin transaction.Mining is a record-keeping process executed through immense computing power. Each Bitcoin miner around the world contributes to a decentralized peer-to-peer network to ensure the payment network is trustworthy and secure.
To securely add to the blockchain ledger, Bitcoin mining computers solve complex mathematical problems. When a solution is found, the latest block of confirmed transactions is added as the next link in the blockchain.
There are three ways to acquire BitcoinBitcoinBitcoin is the forerunner of the cryptocurrency market. Operating on blockchain technology, Bitcoin is set to disrupt the currency market. Invented in 2008:
The process of discovering new Bitcoin is described as mining because it resembles the process of miningData MiningData mining is a process of uncovering patterns and finding anomalies and relationships in large datasets that can be used to make predictions about future for any other resource. With gold mining, miners search and dig through the earth in hopes of striking gold.
With Bitcoin, miners attempt to find Bitcoin through solving complex mathematical problems. Blockchain is the technology that cryptocurrency is built on. It is a ledger that is publicly distributed and records every Bitcoin transaction.
It is literally a digital chain of blocks. Each block contains a group of Bitcoin transaction information. Miners add to the blockchain by using computer processing power to solve complex mathematical problems. Solving the problems will result in the block being successfully added to the chain. The miner who correctly solves the problem is awarded Bitcoin.
The above forms the basis of the complex process of Bitcoin mining. It helps keep the payment network secure and trustworthy. The network is built on a peer-to-peer network, meaning that every single miner across the globe is contributing their computing power to maintain the network, confirm its transactions, and keep them secure.
Satoshi Nakamoto, the creator of Bitcoin, designed the Bitcoin network to allow for a block to be mined every 10 minutes. To maintain this 10-minute pace, the difficulty of the mathematical problems adjust automatically.
When there are more miners and more computing power attempting to mine, the level of difficulty will increase. When there are fewer miners and less computing power, the level of difficulty will decrease.
At the beginning stages of Bitcoin in the early 2000s, individuals interested in Bitcoin mining were able to do so using their personal computers. As its popularity increased, so did the difficulty of mining.
To accommodate the growing level of difficulty, more computer processing power was required. Soon, miners used gaming computers to attempt to mine Bitcoin. The process repeated, and the mining difficulty and amount of computing power required increased.
Solving the Bitcoin algorithm to add to the blockchain and receiving Bitcoin requires an immense amount of electricity. Keeping electricity costs low is key to making Bitcoin mining profitable and sustainable.
The block reward is how much Bitcoin is rewarded for each block that is solved and added to the blockchain. The block reward is designed to halve for every 2,016 blocks mined. It is called the halving process and happens every four years.
It means that in 2020, for every block a miner solves, they will receive 6.25 Bitcoins. The halving will continue until the last block and coin are mined. With each block of Bitcoin being mined in 10 minutes, the last coin is predicted to be mined in 2140.
With the blockchain, the network is served by the entire global community of miners. Each contributes to confirming the legitimacy of each transaction. As an incentive to contribute, miners are awarded for their services with a block.
Bitcoin offers a disrupting technology in the blockchain. The currency itself is decentralized, allowing transactions to happen globally without government restrictions and delays. Miners of Bitcoin see value in the decentralization of cryptocurrency.
With the latest mining technology, Bitcoin mining can be broken down to determine a stream of income based on the output of mining rigs (computers). The following are the important factors to Bitcoin mining profitability:
Miners need to own the latest hardware to compete with the increasing requirements for successful mining. Equipment can become obsolete in a matter of years. They need mining-specific hardware, which can be costly. The latest ASIC mining rigs cost over $1,500 per computer.
Power will be the main operating expense. Electricity is charged per kilowatt-hour (kWh). Profitability for mining can float from $0.03 $0.08 per kWh. A shift in a few cents can make all the difference for mining profitability. It is imperative that a miner can use power at the lowest possible cost.
Bitcoin block reward is 6.25 coins; you will want those coins to be worth as much as possible. If you receive 6.25 coins and the price of Bitcoin is $5,000, your mining operation will likely be unprofitable. If the price is $12,000 a coin, your mining operation may operate at healthy profitability.
With a finite amount of Bitcoin available to mine, the demand will edge higher as the reservoir of available coins to mine shrinks. If Bitcoin becomes more adopted for use as currency, it will add to the demand.
The idea of Bitcoin mining pools rose to tackle the issue of rising mining difficulty. A group of miners pools their computing power together to mine for Bitcoin collectively. If the pool successfully solves a block, all miners in the pool will be allocated Bitcoin in proportion to how much computing power they contributed.
The odds of one single mining rig receiving a block reward are low, but those odds skyrocket when you pool together thousands of rigs. Mining pools are now considered essential to getting any shot of successfully mining Bitcoin.
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5 essential things you need to start mining bitcoins 2020 guide - norsecorp
Mining BTC is one of the hardest things you can choose to do in this day and age, you can be sure of that. Until a couple of years ago, pretty much anyone could invest some resources into this process and be rewarded for this choice. However, in this day and age, we can see that there are even companies that have started mining BTC.
Its needless to say that their resources are much higher than any individual has at his disposal. Therefore, competing with them is not an option. However, that doesnt mean that you dont need to try, especially if you have some solid resources at your side.
Since this process was introduced to the public, we can see that many people have found it pretty interesting due to almost instant rewards. However, we can see that it isnt as beneficial as it was back in the day. Some people compared this whole trend with the gold rush that happened in California, two centuries ago.
Even though the form is not similar to the one weve mentioned, you can be sure that the principle is pretty much the same. Even though the situation is not as good as it was a couple of years ago, we can see that many people are still interested in mining BTCs. So, let us provide you with some of the things you need in order to perform a successful Bitcoin mining.
The first thing you need to have to perform a successful Bitcoin mining is proper equipment. Back in the day, people could mine BTC from their desktop PCs by adding a significant amount of additional hardware to enhance the power your machine has. However, it should be said that this is not the case anymore and that you will need to have some of the hardware that is built only for the reason of mining BTC and other cryptos.
Nevertheless, you need to make sure that your equipment is potent enough to have proper strength. This is important since the number of coins you will be able to mine heavily depends on the strength of your configuration. Thankfully, you can google up some of the hardware you can use for this purpose. Thankfully, you will not have to look for it too much.
It goes without saying that having a BTC wallet is the essential thing you need to have if you want to mine this digital currency. This wallet is the location where you will receive all the BTCs you mine. The way you will receive these to your wallet is through an address that you will have the opportunity to use whenever you want. Some of these wallets can be pretty complex for beginners. But, thankfully, there are simpler ones that will not require investing too much effort into learning how to use these.
From this wallet, you will be able to navigate the further ways of coins, in terms of cashing out, buying something, or investing it further. Since we can see that adaptability of this concept is pretty high in the last couple of years, we can see that these wallets have found its practical use more than they ever had before that. So, you can see how useful and good they can be if used properly. If you are interested in investing some of your coins:
It doesnt matter how strong your equipment is, and how much you are willing to invest in it, if you are not a part of the mining pool, all your efforts are for nothing. A mining pool is a concept of a couple of miners who joined forces to beat the competition in terms of companies whove been made for this purpose only. Therefore, we can see that people have found a way to stay competitive.
Otherwise, this process would be almost impossible due to the resources these companies have. Thankfully, you will quickly see that there are a plethora of different pools you can join and that other members will accept you with open arms since all of you have the same goal, which is to stay competitive.
Probably the newest trend among BTC miners is to have someone else doing the job for you, but paying the expenses and for the service. Its needless to say that you need to conduct serious research before you are able to find the company that will meet all of our requirements and preferences.
But you can be absolutely sure that you will stumble across one of these, without a doubt. You need only need to invest yourself in this research and you will come out with some of the best possible results, you can be sure of that.
Without any doubt, you will need to invest some significant resources into the process of mining BTC due to the fact that the costs can be pretty hefty. When we talk about these costs, we would like to point out that the biggest one would be the electrical bills, which can be pretty high due to the nature of the process as a whole. Furthermore, if youve opted for some kind of cloud mining, you will need to pay a rent rate for the hardware youve chosen.
Its essential for you to be prepared since there is a chance that you will not succeed in this task due to the many uncertainties and too high competitiveness. So, you should invest only what you can spare and nothing above that. That way, you will be to protect yourself in case something bad happens. Surely, if you play your cards right, you can reap all the benefits. If not, that could mean the end of your little journey.
Mining BTC is now harder than it has ever been. But that doesnt mean that its impossible. Its quite the opposite. The measures have been changed, but you can be sure that you can perform it if you meet all the requirements.
5 best bitcoin mining hardware asic machines (2021 rigs)
Bitcoin mining is competitive. Its not ideal for the average person to mine since Chinas cheap electricity has allowed it to dominate the mining market. If you want bitcoins then you are better off buying bitcoins.
Originally, Bitcoins creator intended for Bitcoin to be mined on CPUs (your laptop or desktop computer). However, Bitcoin miners discovered they could get more hashing power from graphic cards. Graphic cards were then surpassed by ASICs (Application Specific Integrated Circuits).
Efficiency Youll want to buy the most efficient bitcoin mining hardware possible. Right now, this is the Halong Mining Dragonmint T1. Since miners use a large amount of electricity, you want to buy one that converts the most amount of electricity into bitcoins.
Price How much does the bitcoin miner cost? Cheap mining hardware will mine less bitcoins, which is why efficiency and electricity usage are important. The fastest and more efficient mining hardware is going to cost more.
Don't forget to think about your tax obligation on the coins you buy or mine. There are some great tax software suites to make it easy! For instance, we have a great guide on how that software works to pay taxes on Coinbase buys.
Bitcoin is based on blockchain technology, a decentralized platform which takes power away from a central authority and gives it to the average person. Sensitive information is stored on the blockchain rather than large data centers, and is cryptographically secured. A vast amount of people, known as miners, all work together to validate the network, instead of just one person or government.
In the beginning, CPUs were used to solve cryptographic hash functions, until miners discovered that GPUs were far better equipped for mining. As block difficulty increased, miners turned primarily to GPUs.
With stellar performance comes a high price tag the best ASIC chips will run you a few thousand dollars each. Upon creation, Bitcoin blocks were confirmed by the average person using their desktop once ASICs hit the market, things changed.
ASICs rendered GPUs useless. ASIC developers, including Bitmain, granted early access to large mining cartels rather than the average person. Nowadays, a large majority of Bitcoin mining takes place in China where electricity is cheap.
When ASICs hit the market, the blockchains validation process became more centralized as more and more hashing power was consolidated into a handful of mining companies, rather than being spread out amongst many miners. Unfortunately, Bitcoin is no longer as decentralized as it was once intended to be.
Mining difficulty on the Bitcoin network has been steadily rising at a rate of almost 0.5% per day. Combine that with the fact that the block reward was halved in May 2020, and you can see why theres fierce competition between miners to successfully validate blocks and remain profitable.
As you can see, the S19 is actually a great investment. Youll almost recoup your entire initial investment in under a year - if paying full price for the S19 from Bitmain - and easily mine your way into the black if you get a discount on the hardware when purchasing.
The WhatsMiner M30S+ operates best between -5 and 35 degrees Celsius (23-95 Fahrenheit). This is a wider range than the AntMiner S19 series, and the lower temperatures it can operate at means you may see slightly improved efficiency.
While youll spend nearly $3,600 per year on electricity, the WhatsMiner M30S++s 112 TH/2 will make you a profit of $3,611 per year. This means that youll need to mine for a little under a year to recoup your initial investment.
Despite this, you get more hashing power per dollar invested with MicroBTs WhatsMiner offerings. And AntMiners are incredibly sought-after by the biggest miners in the world, making it hard to get your hands on one.
We have tried to calculate the amount of money that the Chinese have invested in mining, we estimate it to be in the hundreds of millions of dollars. Even with free electricity we cannot see how they will ever get this money back. Either they dont know what they are doing, but that is not very likely at this scale or they have some secret advantage that we dont know about. Sam Cole, KNC CEO
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what would it cost to build a bitcoin mining rig today?
Poolin.com has put together an updated analysis of the present cost of putting together a profitable Bitcoin mining rig. This information provides a unique insight into the complexities of the ever-changing mining landscape.
In the article, the mining pool notes that there a wide range of individual variables determine mining profitability. Poolin has created a mining profit estimator that breaks down these factors to better understand which rig is the best value.
It is important to note that electricity costs vary widely from place-to-place, and are the most significant factor in long-term mining costs. Thus, more power hungry rigs that also produce a higher hash rate may be more suitable for areas with cheaper electricity, but less so where this cost would be higher.
Critical to all mining operations is the break even factor, which the mining estimator seeks to determine. This is the value of cryptocurrency that must be produced for the cost of the rig to be paid for. For example, one featured Bitcoin mining rig costs USD $1,767 to build and operate and generates $4.56 in profit per day at current prices. Thus, it would need to run for 387 days to become profitable. Factored into this number are electricity costs.
Also, however, is the fact that even after breaking even the rigs will consume electricity. Thus, they will only remain profitable as long as they produce enough crypto to cover this cost. Poolin refers to this as the shutdown price. Determining when a rig has crossed this threshold can be very tricky.
Much has been made of large pools taking over the mining space, notably with regards to Bitcoin. Of particular note is the fact that the most advanced mining rigs often become available to these enterprise operations months before they can be purchased by independent consumers. For example, critics have long accused Bitmain of using its most cutting edge equipment exclusively for its own mining farms and selling only the older rigs on the open market.
Thus, successful Bitcoin and crypto mining requires a very close eye for detail. Efficiency must be a top priority, as every variable will play a role in the final outcome. This includes equipment costs, electricity costs, and choice of platform to mine. However, with proper planning, and access to the best information, profitability can be achieved.
bitcoin mining 101: how to build a cryptomining rig | zdnet
for Hardware 2.0
| February 24, 2021 -- 20:30 GMT (04:30 SGT)
| Topic: Hardware
I'm old enough to remember being given a couple of bitcoins when they were worth next to nothing. Needless to say, I don't have them anymore. Now, with bitcoin and other cryptocurrency prices skyrocketing again, there's renewed interest in cryptomining, which is a way to accumulate cryptocurrency without having to pay for it.
In the most basic terms, you are using a computer (or computers) to solve cryptographic equations and record that data to a blockchain. Taking this a bit deeper, miners verify the hashes of unconfirmed blocks and receive a reward for every hash that is verified. The process is computationally intensive, requiring state-of-the-art hardware if you are planning on making much headway with mining. Mining, as it was back in the days of the gold rush, is not for the faint of heart.
OK, the "rig" is essentially a customized PC. It has all the common elements of a PC: CPU, motherboard, RAM, and storage. Where things deviate from the norm is when it comes to the graphics cards. It's the GPU that's doing that hard work when it comes to mining cryptocurrency, and not the CPU. You're going to need quite a powerful GPU for mining, and likely you are going to be buying more than one. A lot more.
In fact, you can think of a mining rig as a relatively cheap PC with one or more high-performance GPUs attached. You need to connect multiple graphics cards to a single system, which means you also need a motherboard to handle that. You'll also be looking at more than one power supply unit (PSU) if you're planning to push things to the extremes.
OK, let's start with the motherboard. The Asus B250 Mining Expert is a beast of a motherboard, capable of having 19 graphics cards connected to it. That's a lot. The board isn't new -- it was released in 2017 -- and it is finickity when it comes to setting up (it needs a specific layout of AMD and Nvidia graphics cards),
Asus has published recommend GPU layouts for 19-, 13-, and 11-card for this board, and while other layouts might work, I recommend staying with what the manufacturer suggests, as veering away from this is a recipe for a serious -- not to mention expensive -- headaches.
There's no real point in overspending on a CPU for a mining rig since it's the GPU's that are doing the hard work. This quad-core Core i5 is perfect for this setup and works great with the motherboard chosen above.
Depending on how many graphics cards you have installed, you may need multiple PSUs. It's tempting to find the cheapest possible, but since they are going to be pushed hard, I recommend paying a little more.
Even if you've built a PC in the past, I bet you've not had to fit in PCI-E risers. This is where a bitcoin mining rig differs from a regular PC in that you can't have all the graphics cards directly attached to the motherboard, so these risers allow you to connect them indirectly.
You're going to need one of these for every card you connect (other than the card that goes into the x16 PCI-e slot). This six-pack of powered risers are great and provide stable power to your graphics cards.
This is a great card and everything you're looking for in a mining rig. Loads of potential for overclocking, stable, and great cooling. Another nice side benefit is that it's quite an efficient card, which means lower power consumption and reduced mining costs.
Another example of you get what you pay for: A high-performance graphics card that offers power, performance, and a nice level of efficiency. Again, the price is eye-watering, which really is the biggest downside.
for Hardware 2.0
| February 24, 2021 -- 20:30 GMT (04:30 SGT)
| Topic: Hardware
7 of the best bitcoin mining hardware for 2021
Written by Clifford Chi
Picking the wrong hardware could cost you more money to operate than the amount of funds you earn mining Bitcoin with it.To avoid losing a profit on your Bitcoin mining, we curated a list of the best Bitcoin mining hardware, with their price, hash rate, and energy consumption, to help you decide which hardware is best for you, no matter how much mining experience you have. Read on to find the right Bitcoin mining hardware for you.
Since it's considered the most popular Bitcoin mining hardware in the world, the Antminer S9 is entirely sold out on Bitmains website. Fortunately, though, Bitmain released the Antminer S9i for only $499 this May. The S9i boasts a hash rate of 14 TH per second and an energy consumption of 1,320 watts, which makes it one of the most efficient Bitcoin mining hardware out there.
If youre an intermediate or expert miner trying to make a profit, the low upfront cost and high efficiency of the Antminer S9i could offset its somewhat lofty energy costs and help you make some money.
Out of all the Bitcoin mining hardware on the market, the DragonMint T1 has the highest hash rate of 16 TH per second. And with an energy consumption of 1480 Watts, which translates to a 0.075 Joules per Gigahash ratio, it's the most powerful and efficient Bitcoin mining hardware out there.
Naturally, theres a lot of demand for the DragonMint T1, so you'll have to pay a hefty price of $2,729 to buy it. But if youre an expert miner with low electricity costs, the power and efficiency of the DragonMint T1 could offset its high upfront cost and help you turn a profit.
With a hash rate of 12.5 TH per second and energy consumption of 1,576 Watts, the Antminer T9 is less powerful and efficient than the Antminer S9i, but its considered the more reliable option. It has higher quality chips compared to the S9i, so its more stable and doesnt burn out as fast.
Even though it uses the most power out of all the hardware on this list, requiring 2,050 watts of energy, the Whatsminer M3X is also one of the most powerful, possessing a hash rate of 12.5 TH per second.
The M3X is also more affordable than other powerhouse hardware, costing $1,022, which can offset its high energy costs and help you earn a profit. If youre an expert bitcoin miner with below average electricity costs, this could be the best hardware for you.
Bitmains Antminer R4 falls right behind the Antminer S9i in terms of efficiency, with a hash rate of 8.7 TH per second and a small energy consumption of 845 watts. Another one of the R4s best features is that it runs almost silently, making it the ideal hardware for mining bitcoins at home.
The R4s convenience and efficiency comes at a cost, though -- youll need to spend $2,999 to buy it on Amazon. If youre a hobbyist or intermediate miner trying to make money at home, consider using the Antminer R4.
Listed at $300 on Amazon, the Avalon6 is one of the most affordable Bitcoin mining hardware, and it's the easiest to set up. But it also has low efficiency, possessing a hash rate of 3.5 TH per second and a relatively high energy consumption of 1050 watts.
Unless your electricity costs are extremely cheap, using the Avalon6 to mine more Bitcoin than it costs to operate is nearly impossible. The Avalon6 is best for beginners or hobbyists, since youll most likely never make a profit using the hardware.
Another solid Bitcoin mining hardware for beginners or hobbyists is the Bitmain Antminer S7. Its low $200 cost matches its low efficiency -- it has a hash rate of 4.73 TH per second and energy consumption of 1293 watts. But if Bitcoins price shoots up and you can find extremely cheap electricity, its possible to make a profit using the hardware.