So you’re thinking of becoming a bitcoin miner? With the current price of bitcoin hovering around $9200 at the time of writing, it sounds like it might be a lucrative pursuit. After all, who doesn’t want $9200 in their pocket? But before you get too excited, let’s take a step back and consider all that is involved in mining 1 bitcoin. More importantly, just how long does it take to mine 1 bitcoin?
The Short Answer
The short answer is you can’t just mine one bitcoin. Bitcoins are awarded for mining one block and that reward currently sits at 6.25 bitcoins. So technically, it is impossible to mine just one bitcoin.
Technicalities aside though, we know that it takes, on average, 10 minutes to mine one bitcoin block and be rewarded with 6.25 bitcoins. So using these numbers, it would take 1.6 minutes to mine one bitcoin. But that is on a global basis, using the global bitcoin hash rate (computing power). The more interesting question is, how long would it take for you, as a solo miner, to mine 1 bitcoin?
Well, that depends. To answer that question, let’s first explain the bitcoin mining process.
What is Bitcoin Mining?
Let’s briefly consider how bitcoin mining works. Bitcoin mining serves two purposes. The first purpose is to ensure the security of the network by confirming and validating bitcoin transactions. By doing this, miners help to prevent the “double-spend” problem which is a scenario in which a bitcoin owner illicitly spends the same bitcoin twice.
The second purpose of mining is to issue new bitcoins. When a miner successfully adds a new block to the blockchain, they are rewarded with newly created bitcoins. When bitcoin was first introduced in 2009, the reward for each block mined was 50 bitcoins. This reward has been halved every four years since then, and currently sits at 6.25.
Mining allows new coins to be slowly released into circulation until the bitcoin cap of 21 million coins is reached sometime in 2140. It is called mining because it is analogous to the mining of commodities like gold from the ground.
Guess The Right Answer
How does a miner successfully mine a block? Bitcoin mining is like a race where miners compete with each other to be the first to solve a complex mathematical problem (also called proof-of-work) and win the reward.
The answer to this problem (the hash) is a 64-digit hexadecimal number made up of numbers and letters. Fortunately, solving this problem is more of a guessing game than doing any actual math. The answer is found by generating random guesses until a hash is found that is less than or equal to the target hash.
Why Miners Are Needed
Bitcoin miners play an essential role in securing the bitcoin network. Without them, there would be no one to do the work of updating the ledger. The more miners there are, the more secure and decentralized the network.
As we mentioned, the process of mining helps to ensure that all transactions recorded on the blockchain are valid, i.e. not malicious, not double spend, etc.. When a transaction occurs, the transaction must be verified and included in a block of transactions. The block, when it has been successfully mined and validated by the rest of the network, can then be linked to the previous block of transactions, forming a literal chain of blocks, hence the name, blockchain.
Anyone can be a bitcoin miner. But what factors will determine whether you will be successful at it?
Factors Affecting Your Success Rate
A couple of factors will make or break your success when it comes to mining. That’s why we included a list for you to be consider.
Bitcoin Mining Hardware
When bitcoin first started out, it was possible to mine bitcoin with just your personal computer because the mining difficulty was quite low. Solving the puzzle did not require much computational power. But as bitcoin grew in popularity and more miners joined the network, the mining difficulty increased. Along with it, the types of hardware used also evolved.
Today, bitcoin mining requires specialized hardware, especially if you want to compete successfully with the million other miners out there. Since it is a fiercely competitive race to be the first to correctly solve the mining puzzle, you will need the most powerful computer you can get your hands on. Computing power on a mining device is measured by its hash rate (also called hash power).
Currently, the most powerful computer designed for mining are the ASICs (Application Specific Integrated Circuits). These computers are specially designed to generate as many guesses (hashes) as possible in a short period of time, without consuming too much power. One of the most powerful ASIC computers out there is the Antminer S19 Pro which can generate 110 TH/s (110 trillion hashes per second).
Given that it is basically a guessing game, miners with more computing power will succeed more often. Statistically, though, it is highly unlikely that the same miner will succeed every time. Therefore the more miners you have, the greater your chances of mining the next block.
This may explain why almost all bitcoin mining is done by large bitcoin mining farms.
Bitcoin mining farms are typically data centers that house a large number of computers and servers. A typical farm can hold as many as 10 to twenty thousand miners.
Bitcoin Mining Difficulty
As we mentioned earlier, bitcoin mining has become increasingly difficult over time. You might think that the opposite would be true. As more miners join the network and the amount of computing power devoted to mining blocks increases, the amount of time it takes to mine one block should decrease. If this were the case, though, all of the available bitcoins would have been mined in a short period of time.
However, the bitcoin protocol ensures that the number of new bitcoins created occurs at a steady rate. It does this by constantly readjusting the mining difficulty so that it always takes, on average, about 10 minutes to mine one block. Every 2016 blocks (about every two weeks), the system looks back on the last 2016 blocks and calculates the average block time. If it is less than 10 minutes, it will increase the mining difficulty. If it is more than 10 minutes, it will decrease the difficulty.
Therefore when there are more miners on the network, the hash rate or computing power increases, but the mining difficulty will increase as well. When there are fewer miners, the mining difficulty will decrease. Currently, the mining difficulty, which is expressed as a number, sits at an all-time high of 17.3 trillion.
Bitcoin Mining Pools
Even though you may be equipped with the best possible miner available, you are still at a serious disadvantage to professional bitcoin mining farms. If there are more than 1 million miners in the network, the chances of you, as a solo miner, being the one to solve the hashing puzzle would be 1 in a million.
Therefore, to increase your odds of success, you may want to join a bitcoin mining pool. In a bitcoin mining pool, all the miners in the pool combine their mining power and work collaboratively to win the competition. When the pool has successfully mined a block, the reward is distributed among all the miners in proportion to how much mining power each of them contributed. Joining a mining pool will greatly increase your chance of earning a bitcoin, even if it is just a fraction of one.
There are currently over a dozen large bitcoin mining pools in the world, with most of them being located in China. In fact, over 65% of the global hash rate can be found in China due to its cheap power, low manufacturing costs, and weather conditions.
The overall hash rate can rise and fall frequently as new miners join the network and older, less efficient miners are retired. It pays to check the hash rate from time to time because while bitcoin mining may not be profitable at a particular time, this could quickly change.
Even if you are set up to be a miner on the bitcoin network, will it be profitable for you? Let’s now consider the factors which determine whether bitcoin mining is profitable.
Calculating Your Profitability
So maybe the first two factors are favourable to you. That’s a good start. But will your endeavours be profitable?
This is probably the greatest expense you will have upfront. You will want to get the most powerful miner you can afford, as measured by its hash rate. You will also want to choose a miner that uses power efficiently. The choice is very similar to choosing a fuel-efficient car. This is because you will consume a lot of power running your miner 24/7. This is measured as W/Gh (Watts/gigahash). In addition, you will also need to purchase cooling fans. All the churning by your miner will generate a lot of heat.
It is important to know how much you must pay for electricity since it will affect your profitability. This can generally be found on your electric bill and is reported as dollars per kilowatt-hour. Power is needed, both for running the miner and keeping it cool. This can get quite expensive, which may explain why mining usually occurs near cheap power sources.
Not all miners are created equal when it comes to consuming energy. Knowing your miner’s power consumption is necessary for calculating profitability. This can be found in the specs for your miner and is measured in watts.
Mining through a mining pool is highly recommended. In this case, you will have to pay a certain percentage of your earnings to the pool for their services. Pool fees are generally around 2%. When joining a pool, you will want to make sure that it is a reputable one. The best ones are very transparent in their processes and in how they calculate rewards. It is also a case of “bigger is better”. This is because bigger pools with higher hash rates tend to discover blocks more regularly than smaller ones. The trade-off, however, is that you will pay higher fees.
Of course, the price of bitcoin will affect your overall profitability. However, be aware that bitcoin’s price can be highly volatile so, at times, mining may not appear profitable. One strategy you could follow might be to mine the bitcoin, then wait for a higher price before cashing it in.
Mining Difficulty Increase Per Year
Like the price of bitcoin, this variable can be hard to nail down since it is difficult to predict how many miners might join the network at any time both now and into the future. However, bitcoin price and mining difficulty are two of the most important, but also the most elusive, variables to consider when calculating profitability.
Once you have gathered your data on the above variables, you can plug the numbers into a bitcoin calculator to determine if it will be profitable. There are a number of bitcoin calculators out there. All will give you an idea of whether bitcoin mining will be profitable; however, beware that the exact answer can vary depending on the assumptions they make in their calculations.
And The Answer is …
According to one source, the current Bitcoin hash rate in the network is 119.01 EH/s (that is 119 quintillion hashes per second). The mining difficulty is 17.35 trillion At this rate, it will take a solo miner 7689.9 days to solve one block and receive 6.25 bitcoins. In other words, mining one bitcoin will take approximately 1,232 days or about 3.37 years.
It is important to note, however, that determining how long it will take to mine one bitcoin is not an exact science as there are many variables that can affect this number. These variables can change at any time and can be hard to predict for the future.
Is Bitcoin Mining For You?
By now, you’ve probably concluded that there must be an easier way to obtain bitcoin. Well, actually there is. The easiest way to obtain bitcoin is to just buy them on an exchange. Then you can use them to make profitable trades on a platform like hedgetrade.com.