Relevance, Profitability and Difficulty of Bitcoin Mining in 2024

Bitcoin mining – how is it happening in 2022, is it profitable now, what is the difficulty and does it make sense? Bitcoin is the most popular cryptocurrency in the world. The first mention of it appeared in 2008, when an unknown creator under the nickname Satoshi Nakamoto published an article “Bitcoin. Peer-to-Peer Electronic Cash System. At the time of its inception, bitcoin was worth almost nothing. It was mined only by computer enthusiasts. However, over time, the new cryptocurrency gained great popularity around the world, which led to a significant increase in the rate.

What is mining

Bitcoin is different from regular money. It has no physical expression and is encrypted information that is generated on the Internet. To get bitcoin, you need to mine it. Mining is the extraction of cryptocurrency. The essence of the process lies in the fact that with the help of computing systems complex mathematical problems are solved aimed at attaching new blocks to the blockchain. For the correct calculation, a reward in the form of digital coins is awarded.
Blockchain is a storage technology that is a continuous sequential chain of blocks. It stores information about all transactions, recorded according to certain rules. Each block contains data on transfers, its own unique fingerprint (hash), the fingerprint of the previous and subsequent blocks.
Important! A block hash code is a unique set of characters that is formed based on the type and number of transactions. If the block changes, the hash code also changes. Constant verification of unique codes eliminates the possibility of introducing incorrect information into the chain.Miners are people who mine bitcoins. On their equipment, the “Node” program code is installed, which processes transactions, stores information, and transfers history to other nodes. The miner receives a reward for each transfer made and for adding a new block to the chain. Adding a block to the chain is a game of distillation. Millions of miners are working on solving a mathematical problem using complex computational processes. Only the one who finds the correct answer first wins. When bitcoin first appeared, it was possible to mine it on an ordinary home PC with a good video card. However, the system is designed in such a way that the extraction of coins becomes more difficult each time. Affects the difficulty and number of miners in the network. The more users, the more difficult it will be to find the right option.

How Bitcoin is mined in 2022

Theoretically, you can mine bitcoin on any computer with Internet access. However, high competition and increasing mining difficulty require the miner to constantly upgrade equipment. In 2022, bitcoin mining requires hardware with a computing power of more than 150,000 TH/s.

Mining on video cards

The easiest and most effective way to mine bitcoin. This type of mining takes a minimum of time and does not require constant monitoring. The main thing is to provide the equipment with good cooling, with a constant high load, the video card gets very hot and can break.
For bitcoin mining, it is advised to assemble a farm of several powerful video cards. As a rule, game models are used. They are designed for active gaming, so they are characterized by high performance and a good cooling system. In 2022, the most suitable models are:

• Gigabyte GeForce RTX 2060OC 6G.
• Sapphire Radeon RX 5700XT 1605MHz.
• Asus Radeon VII 1400MHz PCI-E 3.0.
• Asus GeForce GTX 1060 1506MHz PCI-E 3.0.

ASIC miner

A device created exclusively for mining. Used to mine bitcoin on an industrial scale. Asic significantly outperforms graphics cards in terms of performance while consuming less power.
Asic miner performs the same function as video cards – it solves complex tasks for creating and attaching new blocks to the blockchain. Its main difference lies in the fact that all calculations are performed by specialized microcircuits. The narrow focus of this device makes it more efficient. Below are the most popular Asic models in 2022:

• Antminer S19 Pro 104Th.
• Avalon 1246.
• Antminer T17 42Th.
• Antminer S17 53Th.
• Whatsminer M30S+.

Mining bitcoins – step by step instructions in the realities of 2022

The total number of bitcoins in the network is limited by the protocol and is 21 million. This means that when this number is reached, mining will stop. As of July 2022, more than 19 million have already been mined and put into circulation. The limited supply of coins and the high competition of miners makes mining more difficult. Before you start mining bitcoins, you should decide on the method:

1. Solo – individual mining of coins using their own equipment. In case of a successful decision and closing of the block, the miner receives a full reward. However, in a highly competitive environment, it is quite difficult for the first to find the right solution alone.
2. Group – miners unite among themselves in pools that work on finding a solution within the same server. The more members of the group, the more likely it is to be the first to join the block. The main disadvantage of this method is that in case of success, the reward is divided among all participants.
3. Cloud – is a rental of equipment for bitcoin mining. Cloud mining farms fully cover all the costs of purchasing equipment and maintenance and rent out their facilities. Anyone can pay a certain rent and receive in return part of the coins they earn.

There are two main types of cloud mining: hosting and renting power. In the first option, the miner rents installations, in the second – computing power. By renting hosting, the user gets control over the equipment and pays for its setup and maintenance. At the same time, the miner independently disposes of the received premium. When renting power, the user chooses a tariff within which he receives a share of hashing power for use. The income of the miner directly depends on the size of the acquired hashrate. The amount of remuneration is divided between all participants in proportion to the rented part of each. Cloud mining is the most popular way among beginners, which does not require certain knowledge and experience.

Carefully! There are a large number of fraudulent organizations posing as cloud mining services on the network.

Purchase and installation of equipment

Having chosen the appropriate method for mining bitcoin, you should start buying the necessary equipment. Solo mining requires expensive hardware with high computing power. The best option for bitcoin mining is ASIC because it consumes less power with better performance. High performance can also be achieved with the help of video cards, for this you will have to assemble a farm of at least 8 devices. The energy consumption in this case will be much higher.

Even a small mining farm is quite noisy and uncomfortable. Therefore, you should not place it in an apartment with thin walls without sound insulation. The equipment room must be soundproofed or located at a sufficient distance from living rooms.

Particular attention should be paid to equipment cooling. From a constant high load, the component parts become very hot and may fail. Gaming video cards and ASICs are equipped with powerful fans, but even they are sometimes not enough for proper cooling. This is especially true for regions with a hot climate.

Wallet selection

Bitcoin is a digital currency that cannot be taken in hand. Therefore, special programs called bitcoin wallets are used to store and manage it.
Working with the wallet is carried out using two keys: Public – visible to all network users, used to send funds to the wallet; Private – known only to the owner and hidden from strangers. With it, the owner of the wallet signs transactions, managing his finances.

Carefully! The private key should be carefully stored. You can restore it only with the help of a seed phrase – a random sequence of words. In case of loss of the private key and seed phrase, access to the earned money is lost forever.

Wallet types

There are several types of bitcoin wallets, which differ in the degree of reliability and location. Conventionally, all wallets are divided into 2 types:

• cold – work offline.
• hot – constantly connected to the network.

Cold wallets are more secure and harder to hack. They connect to the network only at the time of the transaction. Cold wallets come in several types:

1. Hardware – physical media, which is shaped like a USB flash drive. To work with bitcoin, you need to insert it into a computer and connect to the network.
2. Desktop – a program downloaded to the computer’s hard drive. To store large amounts, you will need a large wallet, which will take up a lot of hard drive space.
3. Mobile is an analogue of a desktop wallet designed for smartphones and tablets.
4. Paper – a printed sheet with the necessary data: wallet address and private keys.

Hot online wallets are constantly connected to the network, which ensures fast and continuous communication with the blockchain. At the same time, the user does not need to install special software on the device, bitcoins are stored on the server. The main disadvantage of such a wallet is the high risk of losing funds as a result of hacking.

How to choose the right pool

Bitcoin mining solo is quite a costly business that requires the purchase of expensive equipment. If earlier it was possible to mine bitcoin using a home PC, today this option only brings losses. Therefore, many novice miners choose to join an existing pool in order to increase their chances of making money. Even one powerful computer is enough to mine bitcoin in the pool. The probability of making a profit is increased by the number of participants who use their computing power.
Each pool has its own conditions, which you need to read before joining it:

1. The commission is a part of the amount that the organizers keep for themselves. The lower the commission, the more profit goes to the miners.
2. Power – depends on the number of participants and their computing capabilities. Communities with low power are less likely to close the block, so they receive less profit.
3. Hardware requirements – large pools set certain requirements for the miner’s hardware. If your hardware does not meet the minimum requirements, you will not be able to join the pool.
4. Reward distribution system – for the owner of powerful hardware, the PROP system is suitable. The method implies the payment of a reward in proportion to the contribution made. Beginners with a weak PC are advised to choose a pool where earnings are distributed among the participants in equal shares.
5. Withdrawal methods – pools can offer several options for earning money: to a bitcoin wallet, bank account or card.

Before choosing a pool, consider several options to choose the most suitable one.

Installing a mining program

To mine bitcoin on home equipment, you will need to install a special program – a miner. In this program, the calculation of mathematical problems and the accrual of remuneration. The site of each group contains information about the software that is suitable for solving all the tasks. It also contains instructions for installation and launch.

How to withdraw money

When bitcoin is mined in pools, the earned coins are stored on the server balance, from where they can be transferred to your own bitcoin wallet or directly to a bank card by converting to fiat currency.
If you mine bitcoin on your own equipment, then the reward is immediately credited to the wallet specified in the settings. Bitcoins can be used to pay for goods and services on the Internet, but their list is very limited. To spend the earned funds, they must be converted into real money. You can exchange bitcoins on currency exchanges or exchangers. It is most profitable to sell bitcoins on exchanges, for this you will need to go through verification and confirm your identity. When converting and withdrawing funds, the exchange takes a certain commission. You can exchange bitcoins in an online exchanger. This is the easiest and fastest way, which does not require identity verification. However, you will have to pay for speed and anonymity – the rate in exchangers is lower than on exchanges. Features of bitcoin mining in 2022, complexity, danger, profitability: https://youtu.

The nuances and difficulties of mining

Mining is perceived by many as a passive source of income. However, in practice it turns out quite differently. To make money on bitcoin mining and not go into the red, you will need to invest a lot of resources. The complexity of bitcoin mining is constantly increasing, which requires regular improvement of equipment. The most modern ASIC and GPU models, which show good results today, become unprofitable in 1-2 years. For constant mining, you will need to assemble a mining farm consisting of several devices. Otherwise, in the event of equipment failure, the business will stop indefinitely. Do not forget about the regular cost of electricity. When buying a device for mining, you should consider its energy efficiency.

Mining calculator

Any business starts with a business plan that defines all the necessary investments, the final profit and payback period. Mining is no exception. Calculating the profitability of bitcoin mining and the payback period for expensive equipment is quite difficult. It is necessary to take into account a large number of dynamic indicators, such as the exchange rate, the cost of electricity, the complexity of the algorithm, and others. Calculating mining profitability manually is very difficult and time consuming. To speed up this process, mining calculators have been created.
Bitcoin mining calculator is a program that will help calculate the profit from bitcoin mining and the payback period of equipment. Calculations are carried out online and take a few seconds. To obtain a correct forecast, you must provide the following information:

• equipment model;
• device hashrate – an indicator of the performance of computing processes;
• power consumption;
• the cost of electricity in the region;
• network complexity;
• cost of equipment.

It is very difficult to calculate the profitability of bitcoin mining in the long term. Therefore, the mining calculator calculates the profitability at the current time. Bitcoin mining in 2022 requires large financial investments, and the payback can take from several months to several years. However, there is always a risk of going negative. To get a stable income from bitcoin mining, you should join the pool. This method is great for beginner miners with weak capacities.