Bitcoin is one of several new forms of digital currency. It’s commonly called cryptocurrency but it's basically a form of digital cash, and that's about all. It sounds simple, but the concept behind Bitcoin and the way you acquire them is truly unique. We’ve seen several copycats pop up since the rise of Bitcoin, but Bitcoin is where it all sort of got started.
If you’re not a financial expert or very computer savvy, the concept is a little hard to understand going by the information found online. However, it’s straightforward at its roots. No one governs Bitcoin except the market where it’s traded or the various vendors that accept it as payment for goods or services. You can transfer it to someone else without going through a bank or other intermediary service.
It’s like standing in the kitchen eating a cupcake. In this scenario, you're the Bitcoin network, and your child is a Bitcoin miner. Your child walks in and asks for a cupcake. You hand them a cupcake, and all is right in the world. You didn't need your spouse or some administrative service to confirm you gave the child a cupcake. You just did it, and it was over. It's crude, but that's a good explanation of the basics.
The problem with this explanation and digital currency like Bitcoin is the double-spending problem. If your cupcake is a digital cupcake and you send it to your child, how do they know they got the only copy of that cupcake? What if you send a copy to your spouse at the same time? This problem has plagued computer scientist forever, and it took Bitcoin, somewhat, to solve it.
The scope of this article is explaining how long it takes to mine a Bitcoin, so we’ll skip the long, technical explanation of how the double-spending problem was solved. Let’s just say someone created a journal to track all the bitcoin and gave everyone access to that journal. That way anyone can confirm that they have the only version of the cupcake you sent them.
The amazing thing about Bitcoin is it was worth nothing a decade ago. You could buy hundreds of them for pennies. As of this writing, a Bitcoin is worth a little over $3,800. That would be a healthy return on your investment if you bought several of them since the beginning. Most people ignored the cryptocurrency and called it a fad or waste of time.
So How Are Extra Bitcoins Created?
If everyone can verify their Bitcoin is the only version of that specific Bitcoin, how do we get more Bitcoins? Part of the solution to the double-spending problem is rewarding people for keeping the journal up to date.
As a reward, these people get a little piece of a new Bitcoin the longer they stay on and help out the network. It’s like mining for gold online without the mess or anyone trying to jump your claim.
That’s a simplified version of what the Bitcoin protocol is and how it works, but it should give you a pretty good idea. Using the Bitcoin protocol, you can deal with one or a billion cupcakes and send them to anyone without using a bank or government agency. Whoever you send them to can be sure you didn't double-spend because the Bitcoin protocol is working.
Satoshi Nakamoto gets the credit for inventing the Bitcoin protocol which is now commonly referred to as a blockchain. The user manages their own funds over a peer-to-peer network that follows a set of protocols that ensure no one double-spends their Bitcoins. Blockchain technology has skyrocketed since its inception in 2008 to rapidly becoming a tool for everyone from Bitcoin to healthcare providers.
How Do I Mine Bitcoin and How Long Will It Take?
Before we get into mining Bitcoin, it’s important to understand that you can get Bitcoins without mining them yourself. You can acquire them by investing in cryptocurrency or buying them from someone. The cheapest way, and we use that term loosely since it's costly to start mining Bitcoin, is to mine them yourself using a computer and time. A lot of time.
We’ll get into the time you’ll need to invest shortly. For now, let’s consider the cost of mining a single Bitcoin. As of this writing, a single Bitcoin would cost between $700 and $2,000 to mine depending on what country you live in and the current electricity rates plus the computer hardware needed to mine it. The cost of the hardware and its power consumption is based on how fast you want to mine.
Most people that mine today do so as part of a mining pool. It’s a group of people that invest their money and power into mining and split the proceeds later. However, unless you have a lot of money to spend on expensive mining rigs, it's unlikely you'll ever make any money off Bitcoin mining. It is fun to participate, and it is exhilarating if you get part of the blockchain correct.
For the sake of time and space, we’re going to keep our semi-technical explanation short. Explaining the mining process in detail is not a simple task. You will need a high-end computer and the best graphics card you can get your hands on to get started. Then you’ll need to buy 50 more computers just like it. Sound fun yet?
Now for the complicated part, how long does it take to mine a Bitcoin? When Nakamoto created the first blockchain, he added rules to the process that increases the difficulty based on how much power is being used to solve blocks. In other words, more people mining Bitcoin increase the difficulty of the equations and keep the network honest and slow.
There's no way for us to tell you how long it will take you to mine a Bitcoin. Your computer hardware and several other factors play a part in how long it takes. We can put it in perspective for you and help you understand the power needed to do it. At the current difficulty to solve a block, a computer from the year Bitcoin was created would require around 1,800 years to solve a block solo.
If you wanted to mine a bitcoin each day, you'd need to buy about 120 AntMiner S9 mining rigs at $415.00 each on Amazon. That’s a $49,800 investment just for the hardware. Now you need a reliable building to house them in that's air-conditioned and has a high amp power service. We’re not sure how much that kind of facility costs in your area.
A single AntMiner S9 would take about 21484762 days to solve a block and earn the current reward of 12.5 Bitcoins. However, the reward is cut in half every four years, so in 58,862 years your first Bitcoin would actually only be a small fraction of a Bitcoin. You can hope the price increases a lot before then, so your descendants could use it.
Is Mining Bitcoin Worth It?
It is definitely worth the money and time investment and every month you could increase your Bitcoin mining empire while still collecting a substantial profit. The problem for most people is coming up with the initial investment which may range from $50,000 to $150,000 just to get started. We suggest starting small invest in a mining pool.
Some Final Notes
We hope our timeline didn’t discourage you from trying your hand at Bitcoin mining. Even if you build your mining network over five years, you still have the potential to earn thousands each month. If you can’t afford a building and a few hundred mining rigs, invest in a mining pool and enjoy the novelty of it for a while. You won’t regret trying it, but you may regret ignoring the chance.