As the title suggests, this article is going to give a brief review of how much money does a Bitcoin miner usually make.
But before we dive into the world of money made by the miners, let’s first understand who these Bitcoin miners are and what they do!
Beginning from scratch, especially for those who are learning about Bitcoin for the first time, the first and foremost thing that we need to know is -what is Bitcoin?
But to understand that, we need to know what cryptocurrency is?
Cryptocurrency: A currency devised to perform the job of the medium of exchange virtually. Typically not being accessible in the physical form, this type of currency uses cryptographic security to protect the transaction details of its users and hence, keep the central authority away from accessing the database.
Today there are many cryptocurrencies available in the digital market, but Bitcoin was the first amongst its contemporaries. And hence we shall learn what bitcoin is.
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WHAT IS BITCOIN?
Initially discovered by Satoshi Nakamoto and described by him as a peer-to-peer electronic cash system in 2008, Bitcoin got its name much later. As mentioned above, it is a digital cryptographic currency that does not need intermediates for the transaction.
The transactions taking place are secured by network nodules using cryptograms and stored in a ledger that is publicly distributed and known as the blockchain.
The currency comes with both pros and cons, but that won’t be an important topic today. Today we are going to focus on how Bitcoin works and how the miners work and earn using it.
Read more about Why is Bitcoin Exploding in Value?
FUNCTIONING OF BITCOIN
The digital currency that is stored in our electronic wallets can be used only through the virtual transaction from one wallet to another.
WHAT DO WE UNDERSTAND BY BITCOIN MINING?
In simple words, Bitcoin mining or directly mining means coming up with a specially formulated computer system that can produce bitcoins.
Even though mining is a job that can be typically described as price and time taking, large groups of people take up the profession of Bitcoin miners simply because of their love for cryptograms.
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JOB OF A BITCOIN MINER
The primary and the most relevant job of a Bitcoin miner is to secure the network that holds the whole transaction procedure.
The thing they do is make the cryptographic codes harder to crack and hence more robust for the thieves to attack the users’ account.
Is it easy?
Mining is one of the toughest jobs and bears almost no profit if you are not professionally trained and even then earning profit out of mining comes hard to most of the miners.
But then why do people get into mining? That is because mining may give you profit, but the chance of that fluctuates, and the rate is sky-high.
After all this negativity let’s see how much does a Bitcoin miner earn?
THE EARNINGS OF A BITCOIN MINER
At present, there are about 21 billion Bitcoins present in the digital market, and the earnings of the miners come from discovering or mining these Bitcoins.
How are the miners paid or rewarded?
The Bitcoin miners are rewarded with the value of a Bitcoin when they successfully mine a bitcoin. But the twist in that is the miner has to be the first amongst all to reach the correct answer, otherwise, if you are late, even after all the hard work you won’t be earning a single penny.
WHAT IS THE VALUE OF A BITCOIN?
The value of Bitcoin is decreasing day by day, but it is happening systematically. After every four years comes a leap year and with that, the value of a Bitcoin reduces by half.
When Satoshi Nakamoto first discovered it in 2009, a single Bitcoin valued 50BTC. Then came a leap of four years, and in 2012 the value decreased by half and ended up to be 25BTC. In 2016 it came down to 12.5 BTC and now that we are in 2020, the current value is about 6.25 BTC.
If we go by the statistics, at the end of 2019 mining a single Bitcoin would reward the miner with about $9,300 that means if you mined a Bitcoin, you would earn about $116,250 (12.5 * 9,300).
Naturally, the amount is huge but once you consider the risk, the investments, the electricity usage factor and the luck factor of whether you will reach the right answer first or not, money or no money, the profession is quite an adventurous one.
Is Bitcoin mining more profitable in 2020?
Now that we are 2020, we need to look at the current scenario before we take up mining as a profession. The updated records provide us with the information that mining has not been at a high stake since the beginning of the year. By the time we enter into 2021, the hash rate will be higher than it was ever before, i.e., more miners will enter the cryptocurrency industry, breaking all the existing records.
So if you are thinking of being one of them, surely look into both the positive and negative factors. Hope you mine a million Bitcoins.