With the ongoing cryptocurrency boom, there has bot an explosion of newcomers into the crypto ecosystem. And, unsurprisingly, one of the greatest topics ter the ongoing boom is bitcoin mining. That’s because 1) bitcoin is the OG cryptocurrency, and Two) because cryptocurrency mining is unlike any phenomenon that humanity’s everzwijn seen before.
Accordingly, the novelty and profitability of bitcoin mining have many of thesis newcomers wondering: is mining right for mij? It’s an significant question to ask before you drown thousands of dollars into a mining project, spil there are numerous factors that might make you tilt “yay” or “nay” when it comes to your own private tastes.
Today, then, wij’ll be looking at the past, present, and future of bitcoin mining to help you get a better idea for whether or not mining bitcoin would be right for you personally here and now.
The Early Days Of Mining
Te the very first days of Bitcoin, Satoshi Nakamoto wasgoed the only miner on the network. Reportedly using several computers at the same time, Nakamoto mined approximately 1,000,000 bitcoins ter the very first weeks of the project, courtesy of only CPUs.
And this dynamic remained for the Bitcoin network’s beginning months, spil more and more miners arrived to use their CPUs to verify the network.
Spil Vishal Finney noted te his “goodbye” letterteken to the Bitcoin community:
“Those were the days when difficulty wasgoed 1, and you could find blocks with a CPU, not even a GPU. I mined several blocks overheen the next days. But I turned it off because it made my laptop run hot, and the fan noise bothered mij. Ter retrospect, I wish I had kept it up longer.”
You and us both, Mr. Finney.
From CPUs To GPUs
One CPU wasgoed supposed to provide a “single vote” on the bitcoin network ter the project’s beginning days, but things soon switched spil GPUs, or graphics processing units, came to the fore. GPUs can produce the same mining power spil dozens of CPUs, so they quickly garnered bitcoin miners’ rente.
Laszlo Hanecz, the person responsible for buying two pizzas for Ten,000 bitcoins te 2010, is allegedly the very first GPU miner of bitcoins. From Nathaniel Popper’s popular book Digital Gold:
“It is not widely known, but ter April 2010, Laszlo wasgoed essentially the very first person to proefneming with using the GPU card te his rekentuig to more efficiently mine Bitcoins. Before that, most Bitcoin users had bot employing their much less efficient CPU to do the computations. Laszlo’s CPU had bot winning, at most, one block of 50 Bitcoins each day, of the approximately 140 blocks that were released daily. Once Laszlo got his GPU card hooked te he began winning one or two blocks an hour, and from time to time more.”
After GPUs came specialized mining hardware devices called ASICs, which remain spil the standard-bearer bitcoin mining hardware today. The very very first ASICs were spil powerful spil dozens of GPUs, while modern ASICs are more than 200 times powerful than the inaugural generation of ASICs!
Naturally, then, ASICs are the gold standard of bitcoin mining ter contemporary times. If you aren’t mining with ASICs, and lots of them, then you’re very likely not making any legitimate terugwedstrijd on investment (ROI) here and now.
Bitmain ASICs at work.
March Of Enlargening Difficulty
Beyond the evolution of mining hardware te bitcoin, it’s crucial to understand the bitcoin mining becomes more and more difficult spil time goes on. Satoshi Nakamoto designed the original cryptocurrency to adjust its difficulty every 2016 blocks.
This means bitcoin is little by little firmer and firmer to mine, with block prizes halved every several years. Nothing is to switch this dynamic going forward, spil the difficulty is only going to increase.
Now? Mining Is Hard, Expensive
If you hadn’t already guessed where wij were going, the current state of bitcoin mining is difficult and off-putting for casual, everyday investors. Not only is the ASIC hardware that’s needed growing more expensive by the day, but so too is bitcoin’s difficulty adjustments only going to become stricter ter the future.
That means it’s costing more money to retrieve less bitcoins. And that’s a dynamic that should have anyone gravely considering becoming a bitcoin miner thinking twice. Then again, tho’, there’s still hope.
The Hedge? The Bitcoin Price Potential
Concerns about the expenses and effort that bitcoin mining takes can be mitigate te the years ahead if the bitcoin price resumes to climb to unprecedented price highs.
The BTC price went wild te 2018, and if it proceeds on such a wild trajectory, wij’re possibly looking at BTC prices that could range anywhere inbetween $20,000 USD and $100,000 USD by the end of 2018.
With that said, bitcoin mining would be profitable if such price rises occur because even mining chump switch amounts of BTC today could provide nice sums ter the future provide the bitcoin price keeps surging.
And that’s a bet many miners are joyfully taking now. So a superb question to ask yourself before making the dive into becoming a miner is how strongly do you think bitcoin is going to perform te the years ahead?
The response to that question should inform your verdict.
Cloud Mining Most likely Not Optimal
One option that’s bandied about te the crypto space is cloud mining: you buy a mining contract, and miners around the world do all the work for you.
The problem? The cloud mining kampplaats has bot rife with scams ter latest years, and beyond that, the prices of contracts make it so that ROIs are minimal for investors. To that end, cloud mining is an interesting option for those who are interested ter indirectly becoming a miner, but it’s not going to be spil profitable spil investing ter your own private equipment te most cases.
Get Te Before 2140 …
The final bitcoin is projected to be mined te the year 2140.
What does that mean? You have more than a century to determine whether you want to spend the money necessary to getting a miner operation up and running.
But you won’t want to wait too long if the bitcoin price explodes, right? So timing your entry point if you’re interested is key too.
What About Bitcoin Contant
Bitcoin Specie (BCH) is zuigeling of, sort of Bitcoin (BTC), so what about mining that?
It’s true, you can use the same ASIC gear to mine BCH. The trade-off? The Bitcoin Specie price is several thousands of dollars less than the Bitcoin price at press time, making it so that it’s considerably less profitable to mine BCH for now.
Will this dynamic stay the same forever? There’s no telling. But it’s clear that for now Bitcoin is exponentially more lucrative to mine. And that means mining Bitcoin Specie is best for enthusiasts right now or for those who are dead-set on diversifying their mining activities.
Spil it stands, our conclusion is that bitcoin mining is best for people who 1) have a loterijlot of money to spend on getting an operation up and running, or Two) sultry cryptocurrency enthusiasts who just want the satisfaction of running their own equipment.
Outside of thesis two demographics, you most likely won’t make any real profits on bitcoin mining for now. If you’re wanting to mine on a more limited budget, finding altcoins that support CPU or GPU mining is your best bet, take a look at some of our guides:
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Posted by William M. Peaster
William M. Peaster is a cryptocurrency reporter and copy-editor based out of El Paso, Texas. He’s an avid fan of Ethereum, ERC-20 tokens, and clever contracts ter general.