Bitcoin Mining Calculator | What is Bitcoin Mining
Are you searching for an answer to find out if Bitcoin mining is profitable? Learn in this article what is Bitcoin mining and how to use a Bitcoin mining calculator to estimate costs and potential mining rewards for BTC mining and other cryptocurrencies.
- The maximum amount of Bitcoins is capped to 21 million
- Bitcoin mining is the decryption of the algorithm that determines the creation of new Bitcoins
- Cryptocurrency mining requires special hardware with huge computing power
- BTC mining speed varies according to hashing rates and block difficulty
Bitcoin Mining Calculator
If you don't have the time to read our full article, or if you're just looking for a Bitcoin mining calculator to calculate your costs and potential earnings, you are in the right place.
Use the calculator below to find out the estimate daily coins that you can mine, and the equivalent profit in USD, based on the network hash rate, current difficulty and block reward.
Before “digging” into Bitcoin mining we must do a short introduction on what is Bitcoin, how it was created and how it works.
Table of Contents
- Bitcoin Mining Calculator
- What is Bitcoin
- What is Bitcoin Mining
- How to Mine Bitcoins
- Bitcoin Cloud Mining
- How Long Does it Take to Mine a Bitcoin?
- Bitcoin Mining Difficulty
What is Bitcoin
Bitcoin is a virtual currency, a cryptocurrency, which has become famous worldwide. It first appeared in 2009 and is reputed to be the brainchild of an anonymous developer under the pseudonym Satoshi Nakamoto.
The concept behind the Bitcoin was to create an independent currency, which would be autonomous and not controlled by a central authority, such as central banks or even the state, but which would at the same time allow for traceable, and above all, public transactions, in order to reduce the risk of illegality.
Bitcoins are a digital currency and like fiat currencies can be used to buy and sell goods and/or services. Unlike fiat currencies, Bitcoins do not have a central bank or an intermediary between the people exchanging them. In fact, it is all based on an open-source peer-to-peer network that uses a database distributed among users' computers, called nodes.
This database contains all the transactions on the Bitcoin network and can be checked by anyone without restrictions. Thus, even if people can participate in the mining of digital currencies anonymously, all the transactions are public and traceable.
Transaction’s validity is guaranteed by a public key cryptography system which makes it impossible for users to spend the same coins more than once or to manipulate their wallet by adding Bitcoins which they do not actually own.
Bitcoins can also be bought on specific websites and exchanges and traded with other users, or traded via CFD brokers. You should also be aware that Bitcoin value is highly volatile and fluctuates constantly.
There is a set maximum of 21 million Bitcoins and every four years the number of coins generated has to be halved according to a deflationary rule. The other way to obtain Bitcoins is by mining them.
In short, Bitcoin mining, as its commonly known, means that Bitcoins can be produced by solving specific computer operations, obtaining a portion in return.
What is Bitcoin Mining
Earning Bitcoin is possible in several ways, the most lucrative being Bitcoin mining. This involves making your computer available to perform complex calculations to confirm Bitcoin transactions on the blockchain, thus creating Bitcoins.
These operations are carried out in accordance with certain basic criteria, which effectively prevent criminal actions from occurring.
Bitcoin mining is free and open to all, although as technology improves, only those in possession of sophisticated hardware suitable for calculating and creating Bitcoins are able to participate.
Decrypting the algorithm that determines the creation of new Bitcoins requires a great deal of computing power. Unfortunately, is something unthinkable for ordinary home computers, which would melt down in no time.
Moreover, the calculations are so complex and difficult that it would not be profitable for counterfeiters to duplicate them. That is why every Bitcoin cannot be duplicated.
Technically, this involves brute force attacks on data protected by encryption based on the SHA-256 algorithm. This is all done via computer, but it requires a lot of computing power, which is why, in order to avoid literally melting your PC, it is best to use special devices or other techniques that are less harmful to your home computer.
How to Mine Bitcoins
Bitcoin mining is therefore nothing more than the generation of new Bitcoins Let us now try to understand how to mine Bitcoins.
Bitcoin Mining with Bitcoin ASICs
Mining is done through the use of a computer technique known as brute force attack. Using their computing power, these devices perform complex calculations to decrypt the SHA-256 algorithm on which the cryptocurrency is based.
However, such operations require high computing power. As the mining becomes increasingly more difficult over time, requiring more computing power and energy, there’s the real risk of melting down your home PC in a short time, as well as generating high energy expenditure with costs exceeding earnings.
Therefore, if you want to try Bitcoin mining, it is advisable to rely on alternative solutions designed specifically for this purpose instead of using your own PC.
For this purpose, special computers have been created that are able to perform these operations with less power than a traditional computer would. These devices, put on the market by a number of companies, are called Bitcoin ASICs (Application Specific Integrated Circuit).
The only drawback is that they are often not well built, and tend to drop in performance over time. So, before deciding to set-up a Bitcoin mining rig, try to find out more about the hardware by doing some detailed research. As far as purchasing is involved, you can try Amazon.
Bitcoin Mining with an USB ASIC
Alternatively, you might consider a similar device, but in a smaller format, the USB ASIC. These USB drives have an internal chip capable of performing specific operations quickly.
They are plug & play, and you only need to connect them into your computer to start mining Bitcoin. This alternative is ideal for beginners, and especially, much cheaper than bigger hardware, as the energy consumption is significantly reduced. USB ASIC can also be purchased directly online.
Bitcoin Mining Pools
Another alternative that allows Bitcoin to be mined, without putting much strain on your computer health, or electricity bills, are Bitcoin mining pools.
This is a network that uses distributed computing technology to allow users from all over the world to pool the computing power of their computers for mining.
However, it must be said and considered that the value of the mined block is divided among all users once the operation is complete. There are various systems of this type. With over 1 million Bitcoins mined since 2010, one of the most famous pools is Slushpool.
In order to join a mining pool and use your computing power, it is necessary to have a special client installed on your PC, such as BFGMiner, a modular ASIC/FPGA Bitcoin miner, which uses the computing power of your PC’s GPU card to mine Bitcoins.
Bitcoin Cloud Mining
In addition to the traditional way of mining Bitcoin, through the use of specific and expensive machines, it is also possible to use a cheaper and more convenient method, especially in terms of expenditure of electricity, time and profits.
We are talking about Bitcoin Cloud Mining. Basically, it is a type of mining carried out online, through the lease of dedicated servers, made available to the general public and provided by external companies. These companies propose contracts of varying length and speed for the use of their custom machines.
The rental of such cloud Bitcoin mining machines can be paid for in various ways, including, of course, through Bitcoins, at a fixed monthly fee. Access to the cloud mining will also allow users to mine not only Bitcoins, but also other cryptocurrencies, doubling their earnings in this case.
Each time the cloud mining servers decrypts a block, the user receives the corresponding reward, in the mined cryptocurrency, according to their cloud mining plan.
There are many reliable sites offering Bitcoin cloud mining, but, a word of caution, you need to be careful and understand their reliability to avoid being scammed, as, on the online cryptocurrency’s world, scams grow like mushrooms.
How Long Does it Take to Mine a Bitcoin?
The Bitcoin mining speed, or time to mine, is subject to several variables. Generally, the average time it takes to generate a Bitcoin is 30 minutes, but this is only possible with very powerful machines.
The speed and time of Bitcoin mining, or other cryptocurrencies in general, is given by the type of hardware you use. If you use a simple home computer, even to mine a single Bitcoin can take years!
For this reason, if you are considering embarking on Bitcoin mining you should equip yourself with specific hardware suitable for this type of work.
Bitcoin Mining Difficulty
Bitcoin mining is a very complex task that requires the usage of specific machines organised as a mining rig and, above all, one must bear in mind that there is also a lot of competition.
Bitcoin mining difficulty is also influenced by the number of miners present on the network at any given time. The more machines that join the network to mine and extract Bitcoins, the more computing power increases and the easier it is to find new blocks.
So, the time it takes to generate new Bitcoins depends even more on the network difficulty when you decide to mine.
Which Factors Influence the Bitcoin Mining?
There are several variables influencing a successful Bitcoin mining, in particular they can be classified as follows:
- The hardware: this must be very powerful and capable of solving complex cryptographic problems; moreover, since the action of mining requires a lot of electricity, devices must be well equipped from an energy point of view and also with adequate ventilation;
- Blockchain difficulty: it is important to maintain a steady mining speed, lowering the blockchain difficulty. The more miners joining the network, the less time it takes to validate transactions, while conversely, the more miners leave, the longer the operation takes;
- Mining alone or joining a pool: an important factor that needs careful consideration. By joining a mining pool, the speed for generating new Bitcoins decreases, but the profits will be shared among those who are part of the pool.
There is a lot of Bitcoin mining competition (also with some other popular cryptocurrencies), so, even when starting a new mining connection to the network is not a synonymous that you will get a block.
Even more so if you decide to try out Bitcoin mining by using a simple home computer, chances of getting a return are dim.
It is therefore important to invest in the adequate equipment as to not be left unprepared. Studying all the available options, in terms of hardware, calculate the costs and returns is essential.
If you have any questions regarding the contents of this article, or something that would like to discuss, please use the comments section below. Or, if you are a crypto enthusiast, a Bitcoin miner (or mine any other crypto), please share with our readers your mining experiences.