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Cryptocurrency has dominated the headlines for about a decade now. Bitcoin is still the favorite digital currency, and many people spend their time online trying to figure out how to make money with Bitcoin. Institutional investors have also moved into the space to help drive growth and industry awareness.
There are 3 ways you can get Bitcoin—buy it, earn it as payment, or mine it. The latter is the most rewarding and requires you to create a new bitcoin by solving a computational puzzle. When you do, you get rewarded with a Bitcoin.
How Much Does a Bitcoin Miner Earn?
When Bitcoin was first introduced in 2009, miners would earn up to 50 BTC by mining a single bitcoin block. This was equivalent to $2,238,625.00 (at the time of writing this article). In 2012, the Bitcoin reward was halved to 25 BTC. Since then, the bitcoin reward keeps getting reduced by half every 4 years. Today, the reward is 6.25 BTC–after the last reduction in 2020. So, solving one block today would earn you $279,912.50 (6.25 BTC x $44,787). 1 Bitcoin is equivalent to $44,787 USD.
Bitcoin Mining Hardware
Bitcoin mining requires a significant investment. You have to get the right storage facilities and mining hardware. Although you can mine Bitcoins using the regular GPUs and CPUs, they are extremely slow and use a lot of electricity to solve complex Bitcoin algorithms.
The best hardware for Bitcoin mining is an Application-Specific Integrated Circuit (ASIC) device. It is very expensive and may cost as much as $10,000. However, it’s worth getting because of the high hash rates it offers. An average ASIC will produce up to 100 trillion hashes per second. That’s very fast compared to a regular GPU or CPU. If you don’t have money for the device, or you’re short, you can access lenders by typing “car title loans near me” on your favorite browser.
Bitcoin Mining Pools
Mining pools are coordinated groups of bitcoin miners run by third parties. Miners join Bitcoin mining pools to increase their chances of finding a block by pooling their Bitcoin network processing power (hash rate). Since miners with little mining power have limited chances of solving the next block, they join other miners and share rewards once they solve a block. However, you’ll still need high computing power as you would when solving puzzles alone.
Deciding If Bitcoin Mining Will Be Profitable
When considering if Bitcoin mining will be profitable, think of the high costs of equipment and the electricity bills. Bitcoin mining can be highly unprofitable for individual miners. You may pay high electricity bills and buy very expensive machines and fail to solve a single block.
However, when you join a mining pool, you increase your chances of earning. You can start getting rewards from the day the pool manager activates you. To estimate Bitcoin mining profitability, input your electricity costs and hash speed numbers in Cryptocompare.
