Bitcoin mining is the process of verifying bitcoin transactions, and adding them to the blockchain, the public ledger that bitcoin is based on. This process keeps the bitcoin network secure and creates new bitcoin as well.
When you want to send, spend, or receive bitcoin there is work to be done. Accounts have to be verified, the transaction needs to be made, and the blockchain needs to be updated and okayed by everyone on the bitcoin network. This is where bitcoin miners come in.
Bitcoin transactions happening around the world are all bundled together roughly every ten minutes. One of these bundles is called a block. When the blocks are linked together they form a chain of transactions, the blockchain. Blocks are filled up with transactions until they are full and then new transactions are added to the next block.
The process of bundling transactions, verifying them and adding them to the blockchain is what mining is all about. Miners do this work because they are rewarded for it. They get paid in bitcoin for every block added to the block chain and every transaction they process. Mining releases new bitcoin into the system and miners are paid in these newly made bitcoins.
There are many miners out there, all competing to add the next block to the blockchain and release new bitcoin. Right now about 18.5 million bitcoin have been released. This process will continue until roughly 2140 when all the 21 million bitcoin have been made. After that miners will be paid in transaction fees but there won’t be any new bitcoin made. There will only ever be 21 million bitcoin.
Mining gets harder the more miners there are and the pay out for mining a block gets smaller as more blocks are mined. When bitcoin started the reward for mining one block was 50 bitcoins. Today it is 6.25 bitcoins. The block reward gets cut in half every 210,000 blocks or every four years or so. This is known as ‘the halvening’. This keeps bitcoin’s supply low, keeping bitcoin rare, protects against inflation and will potentially make bitcoin more valuable over time. You can watch the count down to the next one at thehalvening.com.
Two things have to happen for a bitcoin miner to earn bitcoins. The first is they must verify one megabyte (MB) worth of transactions. This technically could be just one transaction but more likely will be several thousand transactions. The second thing that has to happen before a miner is rewarded and a block of transactions is added to the block chain, is miners have to solve an extremely difficult math problem called “proof of work”. What they are trying to do is guess a number that is the same or less that a number randomly created by the bitcoin network called a target hash. It sounds easier than it is. The target hash is a 64 digit hexadecimal number. Here’s an example:
As you can see it’s a huge number and it’s a real gamble trying to guess it. You have roughly a 1 in 18 trillion chance of guessing correctly on your first try. In fact you are 45,000 times more likely to win the Powerball Lottery. That’s why you need very specialized, very powerful computers called ASIC computers to do the guessing. Because this guess work is so difficult groups of miners will often combine their computing power in a mining pool and split the mining reward between them. Most blocks are now mined by pools. In fact most of bitcoin’s computing power comes from mining pool and large companies based in China. No one know exactly but it’s estimated that 65% of bitcoin mining happens there.
Here are the big take aways for bitcoin mining:
Mining verifies, secures, and maintains the blockchain in a decentralized way.
Mining creates new bitcoin by solving very difficult computational puzzles and rewards the miners for their work.
Here are the all the factors involved in mining bitcoin. Hash rate, block reward, mining difficulty and mining difficulty increase, electricity cost, power consumption, pool fees, and bitcoin’s price.
If you’re interested in mining bitcoin here’s how you get started.
Calculate the profitability – you will need to consider the factors mentioned above. Once you have all your numbers in hand you can find many mining profitability calculators
Buy mining hardware – You will need a specialized mining rig. Expect to pay between several hundred and several thousand dollars on mining hardware to make your mining operation profitable
Join a mining pool – This is the best option for success. One mining rig on its own will not be profitable.
Find a crypto wallet – You will need a place to store your mined coins. A cold wallet, one kept offline is the safest place for them.
What To Expect
ASIC bitcoin miners are loud, expensive, produce a lot of heat and consume a lot of energy. You will need to create an environment similar to a data center.
Top Bitcoin Miner Brands
Bitmain | www.bitmain.com
Bitmain Technology Holding Company (“Bitmain”) is a multinational semiconductor company with state-of-the-art IC design capabilities. Bitmain offers products, including chips, servers, and cloud solutions, for blockchain and artificial intelligence (AI) applications.
Founded in 2013 and headquartered in Haidian District, Beijing, Bitmain has research and development centers in Hong Kong, Singapore, and United States. According to Frost & Sullivan, Bitmain is among the world’s top 10 and China’s second largest fabless IC designer.
Bitmain has just announced the new Antminer S19XP, at 140 Tera hashes and 3010 Watts is 30% more powerful and 10% more efficient than previous models. Other recent models include the Antminer S19 Pro which runs at 110TH, Antminer S19 (95TH) and Antminer S19J (100 and 104TH). The Antminer S19J runs at 3050W, which is about 10% more efficient than the other models.
Canaan | www.canaan.io
Canaan is a leading provider of supercomputing solutions, distinguished for superior cost-efficiencies and performance. In addressing the limitations of today’s computing hardware, Canaan strives to advance the world we live in by powering transformative technologies.
MicroBT | www.microbt.com
MicroBT is a technology company which is based on block chain and artificial intelligence. Focusing on integrated circuit chip and products development, production and sales, and provide corresponding system solutions and technical services. We adhere the ideal ”ultimate, win-win, integrity” to provide high quality products and service. Now MicroBT has passed the national high-tech enterprise certification.
IPollo | www.iPollo.com
iPollo Miner is a supercomputer equipment designer, headquartered in Singapore. The company has evolved as a competitive player on the global market with robust designs since its inception. iPollo’s product line includes not only Ethereum V series, Bitcoin B series, and world-first Grin Asic miner G series, but also Filecoin, Chia, Swarm, and other Proof of Capacity consensus crypto miners. Aided by iPollo’s rapid growing footprints, the company is eager to serve our institutional and retail clients worldwide with a mission statement of “improving computing power and stability; reducing power consumption and user cost; maintaining blockchain network security. ”iPollo’s value lies deeply in the supreme quality and prestige reputation amongst our clients and ecosystem. With a strong commitment to continuous exploration and development, iPollo strives to succeed with our clients across the world.
Top Bitcoin Mining Pools
Top 15 Bitcoin Miners
|Bitmain||Antminer S19XP||140 TH||3250 W||0.022 j/Gh|
|MicroBT||Whatsminer M30S++||112 TH||3472 W||0.031 j/Gh|
|iPollo||B2||100 TH||3250 W||0.03 j/Gh|
|Bitmain||Antminer S19 Pro||110 TH||3250 W||0.03 j/Gh|
|Bitmain||Antminer S19J||104 TH||3068 W||0.03 j/Gh|
|Bitmain||Antminer S19J||100 TH||3050 W||0.031 j/Gh|
|MicroBT||Whatsminer M30S+||100 TH||3400 W||0.034 j/Gh|
|Bitmain||Antminer S19J||96TH||2832 W||0.03 j/Gh|
|Bitmain||Antminer S19||95 TH||3250 W||0.034 j/Gh|
|Bitmain||Antminer S19J||90 TH||3250 W||0.036 j/Gh|
|Canaan||AvalonMiner 1246||90 TH||3420 W||0.038 j/Gh|
|Bitmain||Antminer T19||88 TH||3344 W||0.038 j/Gh|
|MicroBT||Whatsminer M30S||86 TH||3268 W||0.038 j/Gh|
|iPollo||B1||85 TH||3400 W||0.04 j/Gh|
|Bitmain||Antminer T19||84 TH||3150 W||0.038 j/Gh|