The first question for novices is exactly what makes bitcoin mining profitable. To answer this question, it is better to first know bitcoin well and get acquainted with how it works.
But to put it simply, Bitcoin is a decentralized currency and network and does not belong to any particular country or company. Decentralization means that no one owns the Bitcoin network and no one can control it alone. Anyone anywhere in the world can become a part of it by connecting to the Bitcoin network.
In other words, Bitcoin is controlled by its users, not one or more specific individuals.
The reason why there is so much hope for the future of Bitcoin is that it is decentralized. The Bitcoin network depends only on its people and users for its activity, not anyone else.
Now that bitcoin is a decentralized network, then when you send bitcoin to someone, who helps to transfer your bitcoin. Who approves or maintains bitcoin transactions? You guessed it: volunteers called “miners” or “miners”.
Of course, the miners do not do this for the sake of God. They provide their devices and hardware to the Bitcoin network, and the Bitcoin network rewards them in exchange for maintaining network security.
What is miner and what does it do exactly?
Miners use their hardware to help keep the bitcoin network secure and to conduct bitcoin transactions. During mining operations, miners must compete in a complex process to solve mathematical equations, and as soon as a miner responds, bitcoins are generated and rewarded. Solving mathematical equations requires the processing power provided by computer hardware. It should be noted that the security of Bitcoin is provided by the same processing power that miners provide to the network.
The bitcoin network and the mining process are technically very complex, and what was said was just a simplified summary for the basics.
In addition to verifying transactions, miners allow bitcoin units to be generated in a unique way and according to a predetermined schedule. Unlike other currencies issued by banks, in Bitcoin everyone can participate in issuing money (bitcoin units).
Bitcoin mining requires powerful devices and electricity.
In order to maintain network stability and to ensure that not all bitcoin units are extracted quickly, there is a criterion in bitcoin called “extraction difficulty”. Bitcoin blockchain blocks are generated every ten minutes. If the processing power of bitcoin miners is too high, it means that miners may be able to generate blocks and extract bitcoins in less than ten minutes. For this reason, the extraction difficulty increases until it takes ten minutes to reach the solution of the equation. On the other hand, if the processing power of the miners decreases, ie the block build time may be less than ten minutes, so in these cases the difficulty is reduced to reach the same ten minutes again.
Also, every four years, during an event called “halving,” the amount of bitcoins produced suddenly halves, increasing the scarcity of bitcoins.
The number of bitcoins mined is limited to 21 million units, after which bitcoins will no longer be produced.
Currently, 12.5 bitcoins are produced every ten minutes, which will be reduced to 6.25 after the next hawing in May 2020. So far, more than 18 million bitcoins have been mined. All bitcoin units are expected to be mined by 2140.
Minimum requirement to start bitcoin mining
To extract bitcoins, you need to provide a series of equipment. The type and number of mining equipment can vary depending on the size of the activity. For example, it is obvious that the equipment required for a large farm is different from the equipment required for a small farm. But as a general rule, to do bitcoin mining you definitely need the following:
Special extraction machine or ASIC
Fixed Internet (ADSL or TD-LTE)
Suitable electricity, cables and electrical equipment
Ventilation equipment (fan)
Special extraction machine
In the early days and months of Bitcoin, mining was done mainly with CPUs, and ordinary home computers could also extract bitcoins. But with the expansion of the bitcoin network and the increase in the power of its miners, today the cost-effective extraction of bitcoins is possible only with special chips called ASICs. Extraction with ordinary computers or mobile phones is not profitable at all.
As a miner, you need a bitcoin wallet to receive and save your income. Wallet software is completely free and can be easily installed on your computer or mobile phone.
You also need internet for bitcoin mining. The speed and volume of the Internet is not very important, but its stability and disconnection are important. ADSL and TD-LTE internet services are suitable for this.
Suitable electricity and electrical equipment
The most important issue in bitcoin mining is electricity. Extraction devices consume a lot of power, and you must have the right electricity and electrical equipment to be able to operate both legally and safely. Under Iranian law, the use of household electricity and subsidies for extraction is prohibited. In the following, we will explain more about mining rules.