Ways to get Bitcoin
Bitcoin is a decentralised cryptocurrency that, since its 2009 launch, has been adopted by retailers, service providers, and even some governments. There are currently 18,924,706.25 million bitcoins in existence, with only 2,075,293.8 left to mine; and these numbers are updated every day.
To get a Bitcoin, you have four choices:
- Purchase Bitcoin.
- Receive a gift in Bitcoin.
- Be paid for goods or services using Bitcoin.
- Become a Bitcoin miner and be a part of the blockchain to process Bitcoin transactions.
Since no single entity owns the Bitcoin network, the system is modulated by miners, a network of distributed computers working to solve algorithms to verify transactions on the blockchain. Bitcoin only works correctly when all users are in consensus. A complete consensus in the blockchain is part of the design to incentivise cooperation.
How does crypto mining work?
Bitcoin mining means solving computational problems in order to legitimise financial transactions. Processing of all block transactions for Bitcoin comes from the computing power of the mining community. Miners maintain the Bitcoin network security and synchronise all points of the Bitcoin system to provide a “proof of work” process.
Transacting
A standard Bitcoin transaction is as follows:
- A user submits a Bitcoin transfer.
- The transaction gets packaged into a block and bundled with other blocked transactions.
- The blocks get sent into the mining community.
- The processors on the mining network then validate the transaction using algorithms.
- The first miner to solve the math problem and validate a new block receives a portion of the Bitcoin mined as a reward.
- The transaction is complete, and the block is added to the blockchain, unable to be modified.
- The recipient receives Bitcoin in their wallet.
Bitcoin mining speed: How fast can you mine one Bitcoin?
The average mining time is 10 minutes per block and this timeframe can only ever slightly vary. Bitcoin has a built in supply schedule that ensures that blocks can only be mined every 10 minutes. Each new block mined adds another 6.25 Bitcoins into circulation. This is the current reward rate.
The rate of block creation adjusts after every 2016th block. This adjustment or ‘mining difficulty adjustment’ also works to keep Bitcoin issuance.
Is it more difficult to mine bitcoin now?
You may have heard that it is more difficult to mine bitcoin now, and in some ways, this is true. Technology has advanced at such a rapid pace that the time and money required to invest in high-quality mining devices may be more than you’re able to earn back, even over a period of time.
When Bitcoin was first established, mining a block was as simple as setting up the open-source Bitcoin software on your computer’s CPU and waiting. As more people mine, the difficulty of the math equations increases, requiring specialised hardware that can maintain competitive speeds.
How much does it cost to mine 1 Bitcoin?
Bitcoin mining requires mining hardware and energy, which can be costly. The actual cost of mining depends on what hardware you use and the cost of your electricity, along with replacement hardware and maintenance costs.
According to industry professionals, the current estimated cost to mine a Bitcoin can be anywhere between USD $7,000 and $11,000. The lifetime cost to mine one Bitcoin with the same gear can cost between USD $15,000 and $19,000, depending on the investments.
Depending on Bitcoin (BTC) price, mining can remain very profitable. At the time of this article, the Bitcoin value is around USD $42,000. Still, those funds are only available through an exchange, and collecting on that profit means giving up your Bitcoin and any additional profits you could have in the future.
The initial cost of investment in Bitcoin mining equipment is high—this cost limits the amount of people who can enter the mining community.
Should you get into Bitcoin mining?
There is no promise that Bitcoin miners will make profits in their process as only the first miner to find the solution to the block’s math problem receives payment. Most of the processing units that have Bitcoin installed understand that profiting off of mining is not guaranteed.
If you have a high-powered processor or the ability to invest in some hardware, as well as the energy available to compute at high speeds, you may find that bitcoin mining can be profitable. The breakeven rate for mining is US 6,000 after factoring in the cost of hosting and energy.
Is there anyone mining Bitcoin profitably?
If the price of Bitcoin increases and the number of miners decreases, any miner actively processing transactions has a higher probability of finding a block first for a reward.
There are some individuals mining Bitcoin profitably, but crypto mining companies like Marathon Digital and Hut 8 utilise the funds of investment firms to keep their mining equipment functioning at high-speed and in top condition.
Bitcoin can be a profitable investment when you have the money to spend on the right equipment or come by it through luck. Keep in mind that the value of a Bitcoin is only worth what someone is willing to pay for it.
The future of Bitcoin mining
Whether or not you get into Bitcoin mining can depend on many factors. There can be great profit in Bitcoin mining for someone with the right equipment or the ability to fund a mining operation.
As cloud computing capabilities have increased, some companies have enabled their users to mine Bitcoins without purchasing any hardware – customers just pay for the electricity consumption and mining fees. The downside of cloud mining is that it offers limited security, and fraud and false advertising is common.
