Bitcoin is the first and top cryptocurrency across the world. It was launched in 2008 by an anonymous group called Satoshi Nakamoto.
It is a cryptocurrency which operates free of any government or political control. Instead, peer-to-peer software and cryptography is the functionality behind bitcoin and its success. A publicly distributed ledger records the bitcoin transactions and copies are held on the servers across the globe.
Due to these amazing features, bitcoin mining emerged as the most preferred activity among people to gain higher profits and rewards. And, this made bitcoin to be listed on every crypto exchange in India. Till now, bitcoin is mined by crypto miners however, the configurations and cryptography have been advanced to strictly limit the competition. Also, there are plenty of other cryptocurrencies available in the market today, attracting several bitcoin investors and miners to themselves. However, bitcoin has its own place, and those miners who think bitcoin mining is not profitable need to read this article to clear their speculations.
First things first, what is bitcoin mining?
Bitcoin mining is a process where the miners mine the coin by passing through various mathematical problems and cryptographic algorithms while competing with each other. Unlike the fiat currency and banking system, Bitcoin has no central clearing. Instead, users play the role of the bank or financial institutions in verifying transactions through Bitcoin mining. As a result, miners are rewarded with the cryptocurrencies which they mined for effectively working as the auditors of sorts.
The Bitcoin mining process is both technical and strenuous. Though there is good news: Miners do not need any technical know-how as one can install Bitcoin mining software to unload the burden.
Having said that, there are different hardwares and softwares required to carry out the mining successfully. CPU, GPU, and ASICS are the prominent hardwares prevailing in the market. Out of them ASICS is the most expensive hardware to set up.
When talking about the softwares, Easy miner, Cudaminer, Miner.money are some popular tools to be used for bitcoin mining.
Now the main question comes, Is bitcoin mining worth it?
The short answer is yes. But, the long answers practically depend upon certain factors. Yes, crypto mining can be profitable to those who can invest huge amounts in equipment and hardware. And, the chances of success are dependent on the following factors:
Electricity cost– A mining rug absorbs a lot of power as it comprises a lot of components such as cooling machines, etc. A basic ASIC will consume 1500 watts of electricity per hour. So, this can be a major concern for the miners before starting bitcoin mining.
Hash rate- It is a term for the number of complex calculations meaning hardware can perform. For example, if we talk about ASIC, it has above 13.5 TH/s.
Mining pool charges- Bitcoin being the best cryptocurrency in India has the highest charges. Basically, a mining pool is the group of miners who lend their hardware and resources to each other for collective mining. But, the energy generated by pooled hardware is always higher than the single one. In addition, the rewards are also divided among the participants of the mining pool.
Last but not the least, the determinant of profitability is the price factor of bitcoin. People invest or buy bitcoin because of popularity and higher returns. However, trading and mining both can be drastically affected when there are fluctuations in demand and supply of the coins. Hence, take every step carefully keeping in mind all these determinants, hardware and software. Also, individual mining is proven to be more successful than pool mining. If you can, consider solo mining for better results.