For those looking for a profit in the cryptocurrency world, Bitcoin mining stays one of the most attractive activities. Miners continue purchasing pricy mining rigs and use immense amounts of electricity to make profit from Bitcoin mining.
Is Bitcoin mining still profitable and how long does it take to mine 1 Bitcoin? Let us check.
What Is Bitcoin?
Bitcoin is the first cryptocurrency. It was created by Satoshi Nakamoto to enable peer-to-peer anonymous transactions.
There are no physical coins. Bitcoins are balances kept on a public ledger called the blockchain. These balances are kept by using private and public keys - long strings of symbols (numbers and letters). These strings are not random. They are created by a special encryption algorithm.
Public keys are used as addresses to send Bitcoins. Private keys provide access to the coins stored in a ledger. They serve as proof that a specific coin belongs to you.
When you send BTC to another user, the transaction shall be confirmed and registered in the blockchain. This process is called mining and is performed by miners.
What Is Bitcoin Mining?
Mining is not limited to transaction confirmation only. It is the only way to create (mine) new Bitcoins.
As you know, blockchain consists of blocks. A block is a specific volume of data (in the case of Bitcoin, we speak about 1 MB), and it consists of transactions. As soon as the volume of transactions reaches 1 MB, the block can be mined, and miners receive their reward. For now, their reward equals 6.5 BTC per one block. So, 6.5 BTC are formed every time a new block is mined.
One block is added to the Bitcoin blockchain approximately every 10 minutes. It means that every 10 minutes, 6.5 Bitcoins are formed.
How long does it take to mine 1 Bitcoin though? We can say that 1 Bitcoin can be mined every 10 minutes, but it will be a part of the 6.5 BTC reward.
Let us continue with the calculations though.
If every 10 minutes, a new block is created, then, each day, approximately 144 blocks are mined. It means that every day, around 900 Bitcoins are given as a reward to miners.
Considering the current Bitcoin price, mining looks very lucrative.
But before you start planning on what you will spend the mined funds, it is worth considering some details.
What Determines How Long It Takes to Mine One Bitcoin?
There are thousands of miners competing to confirm one block per 10 minutes. Only those who confirm the block get the desired reward. Chances that you will be among them are very low.
While earlier, mining a block was not difficult, and an individual could do it without any effort, the situation has changed now. An individual miner cannot mine a block anymore. Even a mining rig has very low chances to succeed. Now, miners form mining pools, and when a pool mines a new block, the reward is shared among all the pool participants proportionally to their contribution to the mining efforts. Even if a pool manages to confirm a block, you get only a small share of the reward.
You cannot forecast how long it is going to take to mine 1 BTC for you, but you can increase your chances to succeed by choosing the appropriate mining hardware and joining the right mining pool.
Difficulty
Earlier in Bitcoin’s history, users could mine Bitcoin with a usual computer. It is not the case anymore though. The reason is the Bitcoin mining difficulty. To ensure the blockchain’s smooth functioning, the Bitcoin network is made to produce one block every 10 minutes approximately. If the number of miners increases, they can produce a block significantly faster. To avoid it and keep blockchain stable, the network assesses the mining speed and adjusts it to produce one block every 10 seconds.
It means that if several thousand mining rigs work to solve a computational puzzle, they will do it much faster than if, say, several thousands of miners are working to solve the puzzle. That’s why the network adjusts the mining difficulty level approximately every two weeks. If during the previous period, the time needed to mine one block was lower than 10 minutes, the mining difficulty increases. If it was higher, the mining difficulty decreases.
Mining Hardware
The initial idea of Bitcoin was to make it available for mining for everybody who has a computer. With a CPU, you could mine a lot of Bitcoins, maybe even a few dollars during one day (do you remember the two pizzas worth 10,000 BTC?).
Now, mining Bitcoin with a CPU isn’t efficient. Moreover, GPU mining doesn’t bring any positive results, either. Bitcoin is mined with special machines.
ASIC miners are designed specifically to perform the calculations necessary to create a block. Nowadays, though, even a single ASIC miner cannot do much so high the mining difficulty is. Big companies purchase ASIC rigs to mine Bitcoin. One rig price can easily run to as much as 10,000 USD which makes it inaccessible for most people. It elevates the entry-level to individual miners.
Mining Solo or Joining a Pool
Almost all Bitcoin miners join their hashing powers in a mining pool. However, this question still arises from time to time: is it possible to mine BTC solo?
Theoretically, it is possible. If you mine solo, you don’t pay the mining pool fees, and the reward for mining one block is not shared with anybody else.
To be able to mine one Bitcoin per day, you would need to contribute over 0.11% of the total Bitcoin hash rate. It equals approx. 149.2 PH/s, or the combined output of 2,334 Antminer’s S17e mining units. If you can invest in such a mining rig, it could mine one block every 6-7 days which means that you would mine approx 1 BTC daily.
However, there is no guarantee that a more powerful rig doesn’t mine the block earlier than you. For example, even a giant mining operation with over 2,000 mining units takes almost one week to mine one block. For a miner who owns just some machines, it might take years to mine one block. Therefore, mining solo, while offering higher rewards, is much riskier than mining in a pool.
Mining in a pool is connected to some drawbacks such as pool fees, sharing the reward with other miners. But mining in a pool guarantees regular payouts. It also eliminates most of the risks connected to solo mining.
How Many Bitcoins Can You Mine Within One Day?
The Bitcoin network is designed in a way to create one block every 10 minutes. The block reward is currently 6.5 BTC. So, every 10 minutes, 6.5 new Bitcoins are mined.
But it is important to understand that the entire network competes in this block discovery process. It means that among thousands of miners, only one will discover the block. Therefore, your chances to discover a block are almost zero if you mine solo.
That’s why most miners combine their hash rate in a mining pool to increase their chances of discovering a block. In a mining pool, the rewards are distributed among all participants depending on the hash rate they contribute.
Therefore, the more hash rate you contribute, the bigger reward share you will be getting, and the faster you can mine BTC.
FAQ
How much does it cost to mine 1 Bitcoin?
The cost of mining one Bitcoin varies depending on several factors. The cost mainly depends on two factors:
- Electricity price in the region where mining is performed (mining one BTC in the USA will cost you approx. ten times more than, say, mining one BTC in Venezuela)
- Type of rig used (its hash rate, fees, etc.)
How many Bitcoins can you mine within one day?
The Bitcoin network is designed in a way to enable miners to discover one block every 10 minutes. So, during one day, approx. 144 blocks are created. The reward for discovering one block is currently 6.5 BTC. Therefore, during one day, approximately 900 new Bitcoins are mined and given as a reward to miners.
Conclusion
While Bitcoin mining looks lucrative, there are many things to consider. Mining equipment isn’t cheap. With the hype around Bitcoin, it is unlikely that you can mine it profitably solo even if you invest in a mining rig. Joining a mining pool is also not the wisest decision if you don’t choose the pool correctly. Mining Bitcoin requires planning, knowledge, patience, and money. Then, it can be profitable.
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