How long does it take to mine 1 Bitcoin?

What is Bitcoin mining?

As a seasoned miner and pirate enthusiast who has spent countless hours navigating the treacherous seas of Bitcoin mining, I can confidently say that the world of digital gold is as unforgiving as the seven seas.

Mining Bitcoin involves confirming transactions within the network and adding new Bitcoins to circulation.

Currently, by July 2024, approximately 19.5 million Bitcoins are already in existence. But, the digital currency is designed to have a maximum supply of 21 million coins. The remaining 1.5 million Bitcoins haven’t been mined yet. These Bitcoins are obtained by individuals referred to as “miners” who use high-performance computers to solve intricate mathematical puzzles, a process called Bitcoin mining, in order to generate new Bitcoins.

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As a researcher, I would describe Bitcoin mining as embarking on a digital quest for hidden wealth. Armed with robust computing machinery, I join other miners in the pursuit of a specific 64-digit hexadecimal number, often referred to as a hash. This elusive number serves as a unique identifier for a block containing various transactions. To discover this hash, I employ a process called hashing.

In simple terms, hashing in the context of mining Bitcoin involves using computer hardware to scan through countless combinations of numerical and alphabetical characters (hashes) to locate one that corresponds to the block’s complexity or target hash. Miners who successfully discover the target hash for a block can then validate and confirm its transactions. This action releases additional Bitcoins into the network, making it similar to a game where rewards are concealed, adding value. Only those with the necessary skills and knowledge to uncover these hidden rewards can claim them.

locating the desired hash code might take quite some time, with the duration depending on several elements, including the present level of Bitcoin mining complexity. This complexity is adjusted approximately every 2,016 mined blocks, and it increases or decreases based on the number of miners contributing to the network.

More miners mean a higher difficulty, while fewer miners mean a lower difficulty. It’s like searching for a treasure: it gets harder and harder as more people try to find it, keeping it scarce and adding inherent value. 

The original developer of Bitcoin, Satoshi Nakamoto, coded the system so that the supply would be reduced by half approximately every four years as each 210,000 blocks were mined. This gradual decrease is designed to simulate scarcity in the digital world. Consequently, it’s projected that the Bitcoin supply will reach its maximum limit of 21 million only by the year 2140.

Currently, miners can still gain Bitcoin by receiving transaction fees, however, they will no longer be adding new Bitcoins to the circulating supply in the network.

How do miners mine Bitcoin?

People use specialized hardware known as a mining rig to extract Bitcoin. This equipment can range from an ordinary computer to a specifically designed device, but the key requirement is its ability to follow Bitcoin’s mining algorithm, which is based on SHA-256.

SHA-256 is a technique for encoding information in an unreadable format without the right decoding tools. By jumbling data like passwords, it generates an extremely lengthy code as its representation. This generated code has no meaning to those lacking the necessary tools to unscramble it, thus ensuring maximum security.

Even with the proper tools, decrypting this algorithm takes time. Miners mine a new block every 10 minutes, and the network distributes Bitcoin to miners for their efforts. This release of Bitcoin is called a block reward. Miners also receive transaction fees based on the block’s size. 

Prior to the Bitcoin halving scheduled for April 2024, each block mined would earn 6.25 Bitcoins as a reward. However, following the halving event, this reward was cut in half to 3.125 Bitcoins per block. This reduction in rewards was intentionally built into Bitcoin’s coding by its creator, Satoshi Nakamoto, with the goal of creating digital scarcity and preserving the value of Bitcoin. Consequently, the profitability of Bitcoin mining was significantly impacted by this event.

As the halving occurs, miners find it progressively tougher to garner the same income they previously had, thereby enhancing the rarity of Bitcoin. In theory, this increased scarcity should lead to a rise in its worth.

What’s the average time needed to mine a single Bitcoin?

The length of time it takes to mine 1 Bitcoin can vary due to the network’s built-in difficulty settings.

Each committed Bitcoin block releases 3.125 BTC. To answer the central question, it takes an average of 10 minutes to mine not just 1 but 3 Bitcoin, and that rate will fluctuate over time. 

Just like finding a treasure chest can result in varying amounts of treasure. Similarly, because it requires so much computing power to mine a single block (known as the Bitcoin block time), it’s nearly impossible for one miner to earn the entire 3.125 BTC reward on their own. 

A miner’s hardware will significantly impact how much BTC they will earn. For example, some miners have dozens, if not hundreds, of pieces of mining hardware in an attempt to increase their Bitcoin hashrate. 

If so, they are likely to get a larger amount of Bitcoin per block compared to other miners who have a slower mining speed. It’s as if they are a pirate bringing many shovels on an expedition, expecting a fair portion of the treasures found.

Instead of mining Bitcoins individually, many miners choose to combine their resources by joining a mining collective known as a pool. By working together, these miners combine their computational power (hashrate) and function as a single unit in the hunt for a Bitcoin block. This collaborative approach enhances their chances of discovering the sought-after target hash, thereby earning them rewards proportionate to their individual contributions.

A mining pool operator distributes Bitcoin mining rewards, though often at a fee, and miners can contribute to different types of Bitcoin mining pools.

Different Bitcoin mining pools

Proportional

In this scenario, a mining pool that distributes its earnings proportionally works similar to a pirate who brings many shovels on an expedition. Each pirate (or miner) gets a fair share of the treasure (or rewards) based on how many shovels they brought (or hashrate they contribute). Additionally, like a pirate receiving extra loot from selling stolen goods (transaction fees), miners can earn extra rewards by collecting transaction fees.

Pay per last N groups

In a pay-per-last-N-groups mining pool, miners are allocated into rotating work schedules (shifts) and remunerated proportionally according to their time spent on duty. Essentially, it mirrors the way pirate crews would work in shifts, with those putting in more hours receiving a larger share of the earnings.

Pay-per-share

In pay-per-share pools, miners receive a set income by contributing a specific portion of their mining power daily. This method offers stability when mining Bitcoin, but it means miners give up the chance to earn transaction fees. Essentially, it’s like every pirate in an expedition being required to meet a daily target. Although overtime work isn’t possible, they can anticipate regular tasks and dependable earnings instead.

Which hardware optimizes Bitcoin mining speed?

In Bitcoin mining, an ASIC is the most efficient hardware because it’s specifically designed for the task. It offers significantly faster and more effective performance than CPUs and GPUs.

Picture this scenario: You find yourself in a massive, bustling stadium looking for the optimal seats. You could approach this task in two ways:

Finding new blocks in the realm of Bitcoin mining is akin to snatching up premium seats at an event. It requires swiftness and efficiency, as you’re competing against many others. This is where the importance of hardware comes into play, as it can significantly boost your speed and effectiveness in this ‘search.’

• Central processing unit (CPU): Consider the CPU your standard search-and-find method. It’s similar to going over every row in the stadium manually. It’s not the fastest way to mine Bitcoin, but it does the job.
• Graphics processing unit (GPU): Now, let’s upgrade to a faster drone that can do many tasks at once. Similar to this drone, GPUs are far more capable than CPUs in handling the complex computations required for mining. They can find those ideal seats more quickly by simultaneously searching several rows.
• Application-specific integrated circuit (ASIC): This is like having a highly customized drone made specifically for searching the stadium for the best seats available, and it uses state-of-the-art technology to accomplish the task quickly and effectively. Because ASICs are designed exclusively for Bitcoin mining, they outperform GPUs and CPUs in this task. 

To maximize your Bitcoin mining efficiency, choosing an ASIC is akin to employing a top-tier technological drone that helps you locate optimal spots more swiftly than others would.

How hard is it to solo mine Bitcoin?

As a researcher delving into the world of cryptocurrency, I can attest that solo-mining Bitcoin presents a formidable global competition among all miners. The sheer difficulty of this task makes it a daunting endeavor. To tackle this challenge, miners frequently choose to pool their resources and collaborate, forming a collective force in the pursuit of mining success.

Bitcoin’s proof-of-work (PoW) consensus protocol makes mining a natural competition. The chances of a solo miner beating the rest of the world to a block’s target hash are nearly zero — no matter their mining rigs’ power or choice of Bitcoin mining software. 

A solo miner is like a single pirate setting out on their own, while most pirates have banded together to find treasure. The group can rely on each other and has a better chance of finding the treasure, but the solo pirate, if successful, gets to keep all the rewards.

Initially, when Bitcoin was first introduced, it didn’t take long to mine a single Bitcoin because there weren’t many miners involved. The rewards for mining were also significant, often resulting in miners receiving multiple Bitcoins per block. However, since Bitcoin had a low value, around $1 or less, the reward was still considered reasonable given its proportional worth.

Currently, individual miners often team up with mining pools for cryptocurrency, as this boosts their likelihood of receiving rewards during the Bitcoin mining procedure. For those considering mining but lacking a high-performance mining setup, joining a cloud mining service is an attractive option because it reduces the initial cost of purchasing Bitcoin mining hardware.

Cloud mining services involve individuals renting out their mining capabilities (hash power) through online platforms, with users purchasing a portion of this rental. This way, the actual miners reduce some electricity expenses by passing them onto the paying clients. In exchange, these clients receive block rewards proportional to the share of hash power they have purchased.