What is Bitcoin mining?
Bitcoin mining is the network’s method of transaction validation. This process is also how new Bitcoin are added to the existing supply.
There are currently around 19.5 million Bitcoin in circulation and the cryptocurrency is programmed to have a total supply of 21 million. The final 1.5 million or so are locked away, waiting for users with powerful computers to release them through Bitcoin mining.
Bitcoin mining is like a digital treasure hunt. Armed with powerful computer hardware, miners search for a 64-digit hexadecimal code that validates a block of transactions. This code (also called a hash) is found through a process called hashing.
Hashing requires computer hardware to sift through trillions of hashes to find one that matches a block’s difficulty (also called target hash). Once miners find a block’s target hash, they can verify its transactions are genuine and will issue a block confirmation. The network then releases more Bitcoin (BTC).
Finding the target hash can take miners a long time. The amount of time varies based on many factors, such as the Bitcoin network’s current mining difficulty. A difficulty adjustment occurs every 2,016 blocks and raises or lowers based on the number of miners contributing. More miners means a higher difficulty, while fewer miners means a lower difficulty.
Mining rigs abide by Bitcoin’s mining algorithm, SHA-256. SHA-256 is a cryptographic hash function used in password hashing and digital signature verification, among other applications. In the case of Bitcoin, it is used for hashing.
A new block is mined every 10 minutes, and the network releases a fixed amount of Bitcoin and distributes it to miners. This release of Bitcoin is called a block reward. Before the Bitcoin halving in April 2024, the block reward was 6.25 per block. The Bitcoin halving event reduced this reward to 3.125 Bitcoin, with halvings occurring roughly every four years. This halving process was programmed by Bitcoin’s creator and is designed to create digital scarcity and maintain the value of Bitcoin, which also dramatically affects mining profitability.
Bitcoin’s creator programmed the network to halve every 210,000 blocks (around every four years) to create digital scarcity. At this rate, Bitcoin won’t hit its 21 million cap until 2140.
At that point, miners will still earn rewards through transaction fees but will no longer release new Bitcoin into the network.
What’s the average time needed to mine a single Bitcoin?
The length of time it takes to mine 1 Bitcoin can vary.
Each committed Bitcoin block releases 3.125 Bitcoin. To answer the central question in mind, it takes an average of 10 minutes to mine not just 1 Bitcoin but 3 — and that rate will fluctuate over time. But, due to the massive amount of computing power it takes to mine a single block (otherwise known as block time), it’s almost impossible for one miner to receive all 3.125 of the reward.
How long does it take for one person to mine 1 Bitcoin? This number will range significantly due to the miner’s hardware. For example, some miners have dozens, if not hundreds, of pieces of mining hardware in an attempt to increase their hash rate. In that case, they will likely earn more Bitcoin per block than other miners with a lower hash rate. Many miners join a mining pool to contribute to Bitcoin mining in a meaningful way.
A mining pool is a group of miners all contributing their hash rate as one entity in hopes of finding a target hash. In doing so, miners earn rewards based on their hash rate contribution.
Rewards are distributed by a mining pool operator, who often charges a mining pool fee. However, miners can contribute to different types of mining pools.
Proportional
A proportional mining pool distributes rewards based on a miner’s hash rate contribution. They can also earn additional rewards through transaction fees.
Pay per last N groups
Pay per last N groups mining pools distribute miners into shifts and pay them out based on their time on “shift.” A shift is a set period in which the miner contributes to the mining pool.
Pay-per-share
Pay-per-share pools provide miners with a fixed income, expecting them to contribute a certain amount of their hash rate daily. While this is a stable way to mine Bitcoin, it removes a miner’s ability to earn transaction fees.
How hard is it to solo mine Bitcoin?
Solo mining Bitcoin involves one miner competing with every other miner globally.
Bitcoin’s proof-of-work (PoW) consensus protocol makes mining a natural competition. The chances of a solo miner beating the rest of the world to a block’s target hash are nearly zero — no matter their mining rigs’ power.
In Bitcoin’s early days, mining difficulty was relatively low due to the lack of miners. Block rewards were also much higher, with miners earning dozens of Bitcoin per block. However, Bitcoin was worth less than $1 back then, so the reward was a bit more fitting.
Presently, solo miners join cryptocurrency mining pools to have any chance of earning rewards from Bitcoin mining. Potential miners without a powerful mining rig can also join a cloud mining service to save on the initial investment cost.
Cloud mining services consist of miners leasing out their hashing power via the cloud and asking users to pay for a share of it. As a result, the miners offload some energy consumption costs to paying users. In return, paying users earn block rewards based on their share of hashing power.
How to earn 1 Bitcoin per day without investment?
It takes money to make money. Earning Bitcoin without investment is nearly impossible, but there are inexpensive ways to get involved.
It is nearly impossible to earn 1 Bitcoin per day without investment. Bitcoin mining requires energy consumption, which miners pay through their electricity bills. Moreover, Bitcoin mining is intended to get harder and harder over time. It requires a lot of electricity and specialized, pricey hardware.
It is almost hard for an individual to mine 1 Bitcoin per day, even with substantial expenditure. Anyone wishing to mine Bitcoin would have to compete with powerful mining operations, with their economies of scale giving them a significant competitive edge over individual miners.
As of May 6, 2024, 1 Bitcoin is worth $64,116. Earning this much daily without investment would heavily destabilize the cryptocurrency market. Therefore, beware of websites or programs claiming to help you earn 1 Bitcoin daily for free. These are often scams designed to exploit people looking for quick returns.
Those looking to invest in crypto mining should first learn about crypto trading, blockchain technology and cryptocurrency markets. Over time, they might be able to turn minor investments into larger sums of money with the right information and approaches.
