Try to remember the first time in your life when you hear the words “cryptocurrency” and bitcoin. What can you recall about it, when was it? Is there something else in there that you can instantly remember? The answer is probably “mining”, as in the early days, these three words were practically synonymous.
Mining first became prominent about a decade ago, and back then mining was among the best ways of obtaining it. Miners would generate them at slow but steady rates from the comfort of their homes and doing with their cryptocurrencies as they please. But what is mining really, what it is today, and is it still viable? Keep reading to get answers to those questions, as well as to learn about some insane digital currency facts. To learn more about how you can spend your cryptocurrency ion 2024, visit luxurylifestylemag.co.uk.
What is Cryptocurrency Mining?
The mining of cryptocurrency is the process of obtaining said cryptocurrency through adding transaction records to the public ledger of past transactions. It is done with mining rigs, an adopted name for a single computer with powerful hardware components that is able to perform the complicated computations needed for the mining. The aforementioned ledger of all past transactions is referred to as the blockchain, another term you have probably heard when bitcoin and cryptocurrencies are concerned. The blockchain exists to confirm the transactions to the overall network.
Mining was made specifically to be resource-intensive. Therefore, it is difficult to do as finding enough blocks per day keeps the miners steady and occupied. The main purpose of mining is to set the history of transactions in such a way that it is impractical to modify by a single entity computationally. Through the download and verifications of the blockchain, bitcoin and other cryptocurrency nodes reach consensus about the ordering of events. In addition, miners are paid transaction fees and subsidies for newly created coins, which serves to disseminate new coins in a decentralized way and to motivate people to provide security to the overall system.
Interesting and Insane Facts about Mining
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Mining Chips Evolved
As mentioned, the mining of bitcoins requires very strong computers with powerful CPUs and GPUs. In the beginning, however, between 2009 and 2011, basically any laptop or PC could be used to easily mine bitcoin. Any CPU could provide enough computing power. Then from 2011 to 2013, GPUs quickly took over as mainly bitcoin increased in value. Gaming PC grade graphics cards started taking over since they could solve SHA256 problems much faster than CPUs. However, they were very expensive which brought upon a decline in mining rigs.
However, also in 2011, field programmable gate arrays (FPGAs) attempted to solve this by trying to have the same performance of custom hardware, while also allowing the card owners to reconfigure and customize it. Therefore, GPU mining only dominated for about a year, but FPGAs only lasted for a month before a new thing came. These were ASIC computers which have been largely in use since 2013 when BTC first crossed the $1,000 threshold. ASIC stands for Application Specific Integrated Circuit. These computers were much more powerful and efficient at mining than anything that came before them and they actually keep the bitcoin network running today. Still, they are immensely expensive and not many can afford them.
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Green Mining Revolution in Canada
Hydro Quebec, a Canadian firm, hosts 30 large cryptocurrency miners on their network, and they have been called the place of green bitcoin. According to reports, the company offers the lowers electricity rates in the whole of North America, since it charges the industrial rate of only $0.0248 per kilowatt-hour (Kwh), or 2.48 US cents. This is the price data centers get, while cryptocurrency customers pay 3.94 US cents. This approach is so special because electricity bills are often the biggest problem and obstacle for miners. In order to break even every month, one needs to have a strong rig and mine as much as possible within a month, before a large electricity bill comes knocking on the door. Furthermore, the overall costs constantly keep increasing and there are great differences among countries and regions.
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Mining is not Advised Today / Hobby Mining
As shocking as it may sound, mining for average people with their custom-built PCs is no longer a great nor profitable way of obtaining cryptocurrency. It is very expensive and it is highly unlikely for you to obtain any kind of meaningful profit. Even hobby mining is too expensive for most, but it is something people still enjoy. To mine, you will need a wallet which is a small USB flash-like device that costs about $100 on average. You will then need a quality crypto exchange like Coinbase or Coinmama, and then you have to open up for an ASIC miner rig. If you decide to mine with your regular PC or laptop in 2024, you will not even earn $1 per year while wasting everything you have on electricity. Finally, you have to select a mining pool where many people mine as one. An alternative is solo mining where you will have next to no luck in finding a block on your own. Lastly, you will need mining software in order to connect your hardware to the mining pool.
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Mining Farms Took Over
One of the reasons why solo home mining is no longer viable is because of the existence of enormous mining farms, warehouse-like facilities with hundreds and thousands of ASIC rigs connected together. These behemoths are used for mining all the popular cryptocurrencies at incredible rates.
The success of a farm depends on many factors. These include the electricity rates, how good and modern their hardware is, the scale of their operations, the price of cryptocurrency when the farm sells it, and the current degree of mining difficulty. When all of this is added up, you can see that even with such large-scale operations mining can prove like a difficult endeavor.
In the year of 2024, it was estimated that all mining farms will use more than 75 terawatt-hours of electricity, which is for example how much Denmark consumes in 15 years.
There are farms all over the world, but most of them are locate din China. As of this year, it is thought that more than 65% of all mining happens in China.
Conclusion
Cryptocurrency mining is a complicated business that is far less accessible and viable to common people in 2024. As it was quite profitable some five years ago, the technology changes quickly but electricity and hardware become increasingly more expensive for people to follow. Therefore, mining farms are taking over and solo miners are left behind. Although the idea that anyone can mine is intriguing and appealing, it is also somewhat false and misguiding in the year 2024.
