Bitcoin mining industry has had a roller coaster ride much in line with price movement in Bitcoin. If 2017 was the year the mining industry boomed, 2018 was much of a reality check as the coin took a nose dive to some serious lows after it touched USD 20,000 on price charts. While the industry and the price may be revived or could go another round of dips and rises, the difficulty of mining bitcoin is increasing with every passing day.
If we talk about early years of bitcoin when the mining of Bitcoin was not that widely known, mining was simple and anyone who wanted to do it could do it even via a simple home PC. But as of today, for a miner to mine a single bitcoin, specific mining rigs, and enough electrical energy is required which requires a lot of investment and equal support from the government and local agencies.
A lot of people have tried to summarize a few facts with respect to mining bitcoins. These figures are linked to some variable or the other which includes-
- In terms of computing power, if a miner has a computing power of 800 Th/s then it takes a month to mine a bitcoin. And with the power of 25000 Th/s, you can mine a bitcoin every 24 hours!
- In terms of average time, considering the at present difficulty level, on an average it takes 10 minutes to mine a block and the block reward is 12.5 BTC.
- In terms of country and the electricity cost, South Korea comes in as the most expensive country for mining a single coin at $26,170. From there, Niue, Bahrain, the Solomon Island, and the Cook Islands round out the top five, respectively. On the flipside, Venezuela came in as the cheapest nation at $531. Their electricity rates are heavily subsidized by the government, leading to incredibly low prices. Trinidad and Tobago, Uzbekistan, Ukraine, and Myanmar round out the rest of the five least expensive nations.
As these states reveal, apart from the financial and regulatory factors, there are various other factors that impact the bitcoin mining. Hence it is difficult to give the exact figures as any deviations in these factors may result in the delay of mining a bitcoin. These factors include-
In simple terms, a hash rate can be defined as the speed at which a given mining machine operates. Crypto mining involves finding blocks through complex computations. The blocks are like mathematical puzzles. The mining machine has to make thousands or even millions of guesses per second to find the right answers to solve the block. A higher hash rate is better when mining as it increases your opportunity of finding the next block and receiving the reward.
You might also like: Bitcoin (BTC) Price Prediction 2019/2020/2025: The Future is Already Here
A pre-built mining device from a well-known manufacturer will give the miner the details of the machines hashrate execution or the speed at which the device can perform mining calculations. Device performance is typically measured in terahashes for every calculation solved per second. This statistic can be measured against the current bitcoin difficulty (the calculation of how difficult it is to find a hash) which can give a person a rough idea if their machine performs well.
The mining difficulty is basically a measure of how difficult it is to find a new block in the Bitcoin Blockchain or in other words, how big the nonce is that miners need to brute force to find a hash smaller than the target hash (using Proof of Work).
The mining difficulty is adjusted every 2016 blocks which are approximately 2 weeks considering an average of 10 minutes per block. Bitcoin algorithm provides this adjustment very easily. If the previous 2016 blocks took more or less than 2 weeks to find, the difficulty is increased or decreased in the proportion of the amount of time difference to the 2 weeks.
This difficulty needs to be adjusted because there are variations on how much computing power, i.e. the total hash rate exists in the Bitcoin network. More miners contributing, bigger the total hash rate and the need to increase the difficulty.
Mining also includes the cost of electrical consumption. Unless someone is stealing or getting free electricity, the cost to power a mining rig always comes into play. In order to figure out a machine’s return on investment (ROI), miners must divide the hash execution performance by the number of electrical watts consumed.
Electric power has different costs depending on where you live, for instance, the U.S. the average people pay is roughly 12 cents per kilowatt-hour. In other areas around the world, electricity is cheaper particularly in regions like China.
Another calculation to figure into the equation is the cost to acquire a mining device. Pre-manufactured mining rigs can be anywhere from US$500 to $2,000 depending on performance and if the device is new or used. To get ahead of your original investment you have to mine enough bitcoins to cover the price of a machine and only after meeting this cost, a person then can profit.
How long does it take to mine
As per the current factors (at the time of writing), the key stats with respect to bitcoin mining are-
- Bitcoin Difficulty: 6,379,265,451,411
- Estimated Next Difficulty: 6,541,721,510,871 (+2.55%)
- Adjust time: After 1499 Blocks, About 10.3 days
- Hashrate: 45,867,201,622 GH/s
- Block Generation Time: 1 block: 9.9 minutes, 3 blocks: 29.6 minutes, 6 blocks: 59.2 minutes
- Updated: 19:30 (127.3 days ago)
Average Daily Bitcoin Difficulty for the Last 10 Days
While we have looked at various factors for the time required to mine a bitcoin, in reality it is not easy. There are so many factors that make it difficult to determine the exact time for mining a bitcoin. Apart from the ones mentioned above, there are other factors like-
- What kind of mining hardware you are using
- How much hashrate does your mining rig generate
- How long does our mining rig run for
Most of the Bitcoin mining is overtaken by mining farms and mining pools, so in order to gain some Bitcoin, you must join one or the other mining pool and contribute whatever hash rate you can.
Using traditional PCs or even the GPU rigs might take months before you can earn any Bitcoin, as ASIC chip are dominating the Bitcoin mining scene now. Individual mining is already a downside as it can’t compete with large corporates with hundreds of latest mining rigs running 24*7.
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
John is a talented writer with over two years of experience actively contributing to the cryptocurrency industry by providing credible, interesting and easy to read the content. His main focus is on cryptocurrency price analysis and industry news coverage. Lets follow him on Twitter at @jjisige