Bitcoin mining is the process of verifying a transaction on the blockchain. Miners build supercomputers and race other miners for the next block that needs to be verified. The computers then solve a computational math problem, legitimizing the blockchain transaction. Next, miners are rewarded in Bitcoin for their efforts in validating the blockchain. These supercomputers are expensive to build, and winning a block is rare. However, with proper equipment, the actual process of mining Bitcoin is a relatively fast process.
How Long Does It Take to Mine One Bitcoin?
Typically, it takes about 10 minutes to mine a Bitcoin block, and each block rewards 6.25 Bitcoin to miners that solved that block. Typically, these rewards are split in a mining pool proportional to the hashing power provided by each user. Having the best mining equipment is important as the ecosystem has grown more popular and has become filled with competing miners seeking to receive block rewards.
While Bitcoin could once be mined from just about anyone’s personal computer, today you must invest in state of the art mining systems to have a chance at being successful. To mine one Bitcoin worth of rewards, the time is largely dependent on your miner. For the Antminer S19 Pro, a popular mining machine selling for around $ 10,000, it would take about 1,400 days to mine one Bitcoin. Today, millionaires, publicly traded companies and even the country of El Salvador are your competition in mining for Bitcoin.
Bitcoin Block Rewards, Explained
Miners don’t validate the blockchain just for the fun of it; they are rewarded in Bitcoin for each transaction that they verify. Miners back in 2009 would receive 50 Bitcoin for mining one block. Today that number is much lower, at 6.25 Bitcoin per block. This change in reward is from mining rewards being halved every 210,000 blocks –– or every four years. As miners began to advance their computational power, a new form of mining was created to receive a steadier stream of income –– as opposed to gambling for the full 6.25 Bitcoin reward. This new practice is referred to as mining pools, where multiple computers mine Bitcoin together.
Is Mining or Staking Better?
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Crypto owners who don’t want to be active investors
Hodlnaut’s stated mission is to help individual investors get the most out of their cryptocurrencies. The company partners with institutions like Fireblocks, Jumio, Nexus Mutual and Okcoin to make stable crypto investing possible.
- Anyone who wants to save for the future
- Crypto owners who don’t want to be active investors
- Investors looking to diversify their portfolios
- Quality interest rates for savings accounts
- Easy navigation and a powerful mobile app
- Information for the novice crypto owner up to the advanced trader
- Not FDIC or SIPC insured
- Customer service team isn’t available via phone
The majority of altcoins are using a staking method to secure their network. This popular alternative has proven to be more environmentally friendly. With staking, users are able to lock up their coins for a period of time to secure the network, and in return they are rewarded interest on their staked coins. You can start earning staking rewards on most of your favorite altcoins today through sites such as Hodlnaut or BlockFi. There is also an argument that staking is a more decentralized practice, as anyone can stake but only wealthy individuals with expensive miners can be successful mining Bitcoin.
Despite some clear advantages in staking, Bitcoin maximalists insist on their mining protocol. Their conviction seems to be largely in support of Satoshi Nakamoto’s original whitepaper, Bitcoiners see any change made to the Bitcoin whitepaper as a wrongdoing. Much of the reasoning is that Bitcoin was designed to be anti-inflationary –– the mining protocol was masterfully created to support this goal, with only 21 million Bitcoin to ever be mined into circulation.
Is Bitcoin Mining Bad for the Environment?
Bitcoin mining uses a large amount of energy and is not good for the environment. However, the industry is exploring cleaner mining practices –– such as El Salvador’s use of a volcano as an alternate source of energy to mine Bitcoin. The Bitcoin community largely believes that energy consumption is worthwhile, commonly arguing that less-important practices use more energy, such as the use of Christmas lights each year.
Bitcoin Mining Vs. Bitcoin Investing
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Disclosure: eToro USA LLC; Investments are subject to market risk, including the possible loss of principal.
eToro, headquartered in Cyprus, England and Israel, has provided forex products and other CFD derivatives to retail clients since 2007. A major eToro plus is its social trading operations, including OpenBook, which allows new clients to copy trade the platform’s best performers. Its social trading features are top notch, but eToro loses points for its lack of tradable currency pairs and underwhelming research and customer service features
- US based cryptocurrency traders
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- Simple user interface
- Several major cryptocurrencies and altcoins
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If you are looking for exposure to Bitcoin, it would be better to buy some rather than start mining it. To mine for Bitcoin, you must have a large allowance for mining equipment, technical expertise and wait time to get setup in the network. With investing, you can open an exchange account or download a digital wallet and start trading. A good place to get started investing in Bitcoin and other cryptocurrencies is eToro –– and you can receive free Bitcoin for making a deposit of $ 100 or more.
Today, mining for Bitcoin rarely proves profitable because of the large number of miners competing for a block. Pooled mining exists to give more consistent returns and is often the best bet for those new to mining.
Is Bitcoin Mining Still Worth It?
Bitcoin mining is not worth it for the average person. The steep barrier to entry with expensive setups and deep technical knowledge requirements means that regular people cannot participate profitably. Rewards are rare and far apart. Mining for Bitcoin is only a feasible investment for people or entities willing to invest lots of time, money and mental focus. If you are looking for exposure to Bitcoin, your best option is to buy and hodl.