Is it hard to mine blocks?
In this article, we will take a look at how crypto mining works and we will understand the challenges associated with mining blocks.
What is Crypto Mining?
Mining is the process responsible for validating transactions in Proof of Work blockchains. Transactions are validated by being included in a block that was solved by a miner and published into the blockchain.
To solve a block, miners need hardware capable of hashing (computing) the blockchain's Proof of Work algorithm. In the case of Bitcoin, the algorithm is SHA256, which can only be competitively mined by dedicated ASIC miners. Other blockchains may utilize different algorithms and require other types of hardware, like CPUs or GPUs.
As a miner, your hardware is constantly hashing for a solution to the next block. In simpler terms, the hardware is computing solutions to a mathematical function with new random numbers, in hope that the result fits a specific criteria — if it does, you solved a block!
What are Block Rewards?
When mining on the blockchain, miners spend energy and compute time to validate transactions and secure the network, performing work at a non-zero cost. In order to incentivize miners to perform this work, the blockchain rewards anyone who solves a block with the fees from the transaction they verified and, more importantly, newly generated coins.
Unlike fiat, coins in cryptocurrencies like Bitcoin are not printed out of thin air. Their emission curve is known and programmed into the code, with new coins being minted with each block.
As of the time of writing, the current base block reward for Bitcoin is 6.25 BTC, about 220,000 USD worth of new coins minted each block. In Bitcoin and many other projects, the base block reward gets halved every 4 years, with the next one being less than 200 days away.
Is it hard to mine a block?
This depends on 2 factors: the current network difficulty and how much hashrate (computing power) you have.
The network difficulty is a metric that exists to ensure that the time between blocks remains consistent, and dynamic adjusts as the network's hashrate changes. If a lot more computing power enters the network, blocks would be solved at a faster pace. To counter this the difficulty increases, making it harder to mine a block and bringing the time needed to solve a block back to the targeted time.
Because the network difficulty takes into account the computing power on the entire network, it will be incredibly hard for a single miner with just a few devices to find a solution that meets the minimum difficulty to solve a block.
Currently, some of the best Bitcoin miners can compute 200 trillions of hashes per second (200 TH/s). However, the current network hashrate is several orders of magnitude higher at 447 EH/s, or 447,000,000 TH/s. This means that with a single cutting-edge device, it would take over 43 years on average to compute a hash that is a solution for a block.
Because of this, most small miners combine their computing power on a mining pool, and mine together as one large miner, splitting the rewards from any blocks mined.
How can I mine blocks myself?
It is only easier to mine blocks by yourself if you are either mining on a network with little hashrate, and thus a low difficulty, or if you have a lot of computing power — a significant portion of the total network hashrate.
Fortunately for you, NiceHash makes it simple to acquire large amounts of hashrate on demand, making it possible to solo mine blocks on even the largest blockchains!
With EasyMining you can purchase different hashpower packages to mine for blocks. You are essentially renting someone else’s mining hardware and using it to attempt solving blocks, skipping the costs and challenges that come with investing, maintaining and powering the machines.
With our packages you can get hundreds or even thousands of miners to mine for you for a certain amount of time, meaning that the probability of mining one or more blocks is much higher than if you would run a small mining operation yourself.
Catching blocks with EasyMining Single packages will get you the block rewards all to yourself. In TeamMining packages you can join other miners to acquire even greater amounts of computing power and, thus, higher probabilities of mining a block. Any rewards will then be split among members based on their contribution.