1.BTC mining is a hashrate competition
Lots of people are bad at trading BTC, and most of them sell on the bottm buy on the top. Mining may be a good option for them. Mining is the user’s use of equipment to calculate the mathematical problems provided by the BTC network, and the approach to problem-solving is very simple — guess.
The BTC network will provide a target value.
Miners need to calculate the hash value of the block header. Other values in the block header are fixed and only the Nonce value changes randomly. The miner needs to find the Nonce value such that the hash value of the block header is smaller than the target value.
The calculation of the hash function is a black box, manifested primarily in two points:
1. Inability to predict the result: The parameters are slightly different, and the result is turned upside down without any regularity.
2. Irreversible: Without a specific hash value pattern, it cannot be reversed.
Therefore, miners can only keep trying repeatedly, each time randomly modifying the Nonce value (guess the number) until the calculated hash value is less than the target value.
The more times the mining equipment calculates per unit time, the more likely it is to guess the answer. The number of calculations per unit time is the hashrate. For example, 1TH/s means 1,000,000,000,000 calculations per second. The higher the percentage of the hashrate a user has over the entire network, the greater the probability of mining Bitcoin.
The essence of BTC mining is to compete with the hashrate.
2. The threshold for mining is rising
In order to compete for bookkeeping rights, miners continue to seek higher hashrates. The mining industry has thus gone through multiple stages: CPU mining, GPU mining, professional mining machine mining, mine mining, mining pool mining, cloud mining.
In the beginning, the CPU of a personal computer can be used for mining. In 2010, people discovered that GPU’s large-scale parallel computing power was more suitable for mining, so GPU mining eliminated CPU mining. In 2013, ASIC miners designed specifically for mining appeared, and the hashrates increased again. Subsequently, a mine appeared. A mine concentrated a large number of ASIC miners, but it was still a node on the BTC network, and the hashrate naturally far exceeded the small and medium miners with only a few miners. The mining pool goes a step further than the mine, breaking through the geographical restrictions and pooling the hashrate of the mines from all over the world. Although only a part of the Bitcoin rewards can be obtained in the mining pool, the mining pool has a higher hashrate and there is a greater probability of successful mining.
ASIC miners are generally priced according to revenue expectations. When Bitcoin broke through $63,000, the Antminer S19 once sold for 70,000 RMB, too costly for ordinary users.
Traditional mining requires a large early-stage investment, and site selection, construction, the operation of mines, selection, maintenance, and repair of miners have developed into a highly professional field.
In addition, electricity fees are an important cost of mining. These fees are too high to resist falling currency prices. Large mines can get preferential electricity prices by virtue of their scale advantages, which ordinary people cannot enjoy.
3. Cloud mining, the choice for ordinary people
As a result, cloud mining platforms began to emerge. Cloud mining means that the platform divides the mining power into parts and divides them into plans with different hashrate amount and time periods, allowing users to achieve what they are able, as well as place orders on demand.
Compared with traditional mining, the advantages of cloud mining include:
- No need for users to purchase the entire miner, which greatly reduces initial investment and allows for quick cost recovery.
- Low electricity fees brought by the platform’s scale advantages.
- Easy to understand without requiring too much professional knowledge of its users.
- Professional team handles operation and maintenance — users place their orders and then sit back to enjoy the revenue.
- Flexibility of withdrawal upon terminating the lease.
As the mining threshold rises, users are favoring the cloud mining model that lowers that threshold.
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