When transacting for the first time, many people wonder how long mining a single bitcoin takes.
If you’re wondering the same, don’t worry; this article will guide you on the basics of bitcoin mining. Ever since cryptocurrency came into being in late 2008, the world has become an interesting yet confusing place.
What is Crypto Mining?
Based on the concept of blockchain, cryptocurrencies like BTC came into existence. They are known as the safest way of making transactions.
To put it simply, there are lines of codes that form a secure block which stores information and is encrypted in an elaborate manner. The blockchain only contains 21 million bitcoins that are formed via a mining procedure.
The time and procedure for these transactions differ from 10-minutes to hours or days based on factors that will be later explained in this article.
When Satoshi Nakamoto, whose real identity remains a mystery, created the first cryptocurrency known as the bitcoin, the world was fascinated.
Even though this was not a new concept in the tech world, it was the first one that gained so much popularity. In 2017, the bitcoin reached its peak when it was worth $20,000. This was the result of continuous trading and mining.
The bitcoin creators deployed several techniques to produce the bitcoin. One of the most successful methods used was mining.
Bitcoin mining forms the security mechanism of the bitcoin blockchain by tallying verifying transaction information with the collective ledger. The verifying and tallying process takes loads of computing and complicated mathematical problem-solving skills.
However, it is essential to note that bitcoin mining is not rocket science. However, it takes time, can get frustrating, requires some hard work, and the result is sometimes questionable.
Complex cryptographic challenges need to be solved by using mining hardware when bitcoin mining. This helps look for blocks to collect information
When a new block is found in mining, recent transactions can be saved, recorded, and verified. As a bitcoin miner, you get rewarded for the time and effort that you put in.
How Long Does It Take to Mine One Bitcoin Today?
There is no standard time to mine one bitcoin. In fact, the exact time needed varies based on computing power, equipment, and competition.
In an ideal situation with the best computational power and equipment, mining and processing, one bitcoin would take a total of 10-minutes. While this may seem like a ridiculously less amount of time, it may not be possible to attain for several miners.
A large setup of approximately 30-days is required to mine a single bitcoin. This setup is not economical.
After getting rid of the costs, including costs of electricity, and hardware and software, 0.5 bitcoin of profit remains each month. This means that with some setup, electricity, and manpower, processing a single bitcoin could take $73,000 each month.
To understand how much it takes to mine one bitcoin today, consider the following expenses:
- Costs of power in the region of mining
- Pool fees
- Rate of the rig
- Crashes and unforeseen circumstances, such as hacks
Based on your location, where you choose to mine a bitcoin plays a significant role in the total cost.
There are some countries within South America and Asia that have significantly low power consumption rates. These continents are ideal for bitcoin miners. For example, mining a bitcoin in the US is ten times more expensive than mining in Venezuela.
Just like any other business venture, you need to make some estimates when bitcoin mining. To turn mining into a significant profit, keep in mind the depreciation costs. To do this, start by estimating how much it would cost you to set up a mining facility.
Then, calculate the life of the equipment. Since your rigs will be running all day and night, they are prone to some wear and tear. To ensure maximum profit, it is crucial to invest in superior hardware and keep a lookout for competition.
For most bitcoin miners, breaking even is the goal. While several rig providers ensure warranties for their equipment, this does not always go as planned. Financially, investing in cheaper equipment that is easy to throw out and replace is a better option.
Why You Shouldn’t Mine Bitcoins in 2021
There are three major things to keep in mind when mining bitcoins. These include the electricity costs, the cost of equipment and competition.
Equipment costs are another cost that needs to be kept in mind. The main cost is of the ASIC miner. A good quality ASIC miner can cost anywhere between $1000 to $3000. This is not beneficial for a private person as he cannot get a discount for buying in bulk.
Even though an ASIC can be shockingly expensive, it is important to invest in state-of-the-art equipment. Wondering why?
There is no denying that the latest generation of miners are known to provide the most significant ROI. So, when you find old ASIC bitcoin mining rigs selling for $100, it is important to realize the reason behind the low costs.
Older versions of rigs are inefficient. They use a significant amount of electricity so that you barely have any returns unless you live in a place where electricity is free.
Moreover, ASIC miners are known to become obsolete super-fast.
This means that you can get an ASIC miner when it is first released and use it for 6 to 12-months before it reaches its peak efficiency. Then, the next generation of ASIC miners will come out, making your ASIC outdated.
Residing in a place that has cheap electricity benefits your case. That is why bitcoin mining is a common practice in China. China is known for its cheap hydroelectric power, while Venezuela is known for its low-priced, state-subsidized electricity.
Analysts are not fully aware of how much power is consumed to run an entire network of bitcoin mines.
However, researchers have been able to find a close estimate. Findings from Tokeninsight’s 2021 mining research shows that miners are, on average, paying approximately $0.03 to $0.05 per kWh in 2021.
However, estimates show that the cost to mine one bitcoin will rise to $7,577.51. Based on the current exchange rates, miners can earn a significant amount of profit.
According to Bitooda’s mining report that was published in July, the cost of producing one bitcoin is $5000. Researchers here believe that the bitcoin network hash rate can exceed 260 exahash per second within the next year and a half.
A few months ago, the Cambridge Bitcoin Electricity Consumption Index (CBECI) passed a report stating that 7.46 GW run the bitcoin mining station.
This amounts to 63.32 TWh (terawatt-hours) of constant energy usage. To put it simply, the amount of power being consumed for bitcoin mining is side-by-side with more than seven nuclear power plants.
Competition in bitcoin mining has reached an all-time high. It is increasingly showing the struggle for block rewards between miners.
According to previous reports, mining difficulty hit 7.86 trillion- this new record has by far surpassed the previous peak, which was in October 2018.
Research also shows that new miners have started to compete with each other for new blocks and over bitcoin network security.
Is It Worth Mining Bitcoin as a Private Person?
So, now the million-dollar question- is mining bitcoin worth it?
If you’re looking to make a financial investment, it is probably not the first choice you should make.
Think about it- to make a reasonable profit, you would need extremely cheap (or free) electricity and technical knowledge so that you can optimize the working of your ASIC. Not just that, mining bitcoin requires sheer luck too.
While mining bitcoin is not rocket science, you also have to consider all the hardware and software that will be needed for mining. You may even require a special graphic card that could cost you up to $700. You could opt for a cheaper rig, but this will largely affect the output of your final product.
Years ago, mining was not that interesting. However, now that rates are skyrocketing by the second, mining has become a popular source for collecting bitcoin.
Successful bitcoin miners also earn through the transactions that bitcoin users pay when they make a bitcoin transaction. This allows them to increase their revenues.
Now that you are fully aware of what bitcoin mining is and how it works, we are here to tell you that bitcoin mining is an investment that requires all the luck in the world. It could pay off, but it could also be terribly unsuccessful.
This means that you could invest a large sum of money and lose it all. Since bitcoin mining has become so popular in the last few years, it is unlikely that one can make a profit with one rig and mining pool.
What do you think? Would you want to sign up for bitcoin mining? Let us know in the comments below.