All you need to know about mining Cryptocurrency

All you need to know about mining Cryptocurrency

February 10, 2022 0 By Maxim Hayden

What is mining in Crypto? 

The mining of crypto is often compared to panning for gold that took place in the gold rush days or searching for treasure. All proof of work coins, Bitcoin (BTC), Ethereum (ETH); for now, Ethereum Classic (ETC), and Raven Coin (RVN), require the process of mining to take place for transactions to be ‘validated’ across their networks, and new coins are ‘minted’. 

Sophisticated hardware is used that solves an extremely complex computational math problem. The first computer hardware that finds the solution to this problem receives a ‘block’ of Bitcoin (BTC), Ethereum (ETH), or whichever coin is being mined, before the process begins all over again. This block is the ‘minting’ of the new coins that come into circulation. 

Has the way crypto currency is mined changed? 

When Bitcoin came out, it was done with the intention that all ‘mining’ would be done through any regular personal computer’s processor. However, as time went on, and the ‘difficulty’ of mining increased, this soon moved over to graphics cards (GPUs), and more recently ASIC (application-specific integrated circuit) miners. Due to this, the mining of Bitcoin (BTC) is now out of reach of the everyday people it was once designed for, and most of the mining that takes place is on the Ethereum (ETH) network. With this said, there are still coins that are mined using a computer’s processor, with the most well-known coin still being mined this way, being Monero (XRM). 

How easy it is to mine crypto currency? 

Anyone can mine cryptocurrencies if they have a computer, an internet connection, and access to one of the many pieces of software that allow for someone to connect to the network. Mining can be done solo, or part of a pool. It is most common for a ‘bedroom’ miner to mine as part of a pool, as although this allows for regular smaller rewards, rather than a bigger reward that may or may not ever happen. 

Mining can be carried out on almost any operating system. Although, Windows and Hive OS are the most used Operating Systems when it comes to mining. Unmineable is an application that has made mining accessible for the masses. It’s commonly used by those who have an expensive gaming rig and want it to make money when they’re not gaming. 

Is mining crypto profitable? 

To put it simply, where it may be profitable for one person, it may not be profitable for someone else. There are a couple of variables that are needed to answer this question. The cost of electricity (per kw/h) and what are going to be done with the crypto that’s been mined determine the answer here, as everybody mines for different reasons.  

Some people mine to offset their electricity bill monthly. If this is the sole purpose of mining, then the cost of electric needs to be lower than the cost of the coin being mined. This means that if the cost of electric goes up, or the value of a coin goes down, this could make it unprofitable. 

However, if an individual is mining to “hodl” a coin, in the hope that the price of the coin is going to go up significantly over a period of months/years, then mining regardless of the cost of the coin, and or electric, is irrelevant in this instance. 

Is crypto mining illegal? 

Outside of Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisa, Bangladesh, and China, mining crypto currency isn’t illegal. 

How long does it take to mine 1 Bitcoin? 

As mentioned, the difficulty of mining Bitcoin has gone up exponentially, since its inception. When Bitcoin (BTC) was launched in 2009, hundreds of coins could be mined in a single day, using a standard personal computer. However, with each halving, and increased hash rate, the difficulty of mining Bitcoin (BTC) has gone up. 

At present, a new block can successfully be discovered every 10 minutes, with a reward of 6.25 BTC set as the current reward, as of 2022. Although, the next halving will see this drop to a reward of 3.125 BTC every 10 minutes. 

Due to the power that would now be needed to mine a Bitcoin (BTC), it is much more cost-effective for miners to mine as part of a pool and split these rewards. 

It would take unimageable amounts of power, or hash rate, for an individual to mine a whole BTC, and if they decided to solo mine with a modest setup the odds of finding a block would be less than that of winning the lottery. 

How much do Bitcoin miners make a day? 

The amount of Bitcoin (BTC) that a miner can make in a day directly correlates to the hash rate that an individual is producing. 

How many Bitcoins are left to mine? 

Approximately 19 million Bitcoin (BTC) have been mined to date, of the maximum supply of 21 million. This leaves only 2 million Bitcoin (BTC) to be mined.  

When will the last Bitcoin be mined? 

The last Bitcoin (BTC) is expected to be mined in 2140. 

Why is mining Bitcoin so difficult? 

As already touched on, Bitcoin mining has become as difficult as it has due to the rise of the ASIC miner, and the sheer hash power this brings. Each halving also makes the rewards twice as scarce, again putting pressure on the mining difficulty of the coin.