Taking Luck Into Account When Mining Bitcoin
If you’re looking to make money with Bitcoin, there are two ways to go about it: trading or mining. Between the two options, mining is arguably the better option—especially if you’re in it for the long haul. The Balance notes that you have to pay a lot to set up your mining “rig” (or the computer that does all the mining for you). Plus, there are a lot of miners out there, so the competition is tough. It can take months, or even years, to see a profit. But you will profit; you just have to be a little patient.
So, how does luck factor into all of this? The reason why it could take a while to see profit is because there’s never a guarantee that you’ll mine something. It all depends on your hardware and, most especially, luck.
Luck in mining
Whenever Bitcoin transactions are made, they’re stored in separate, random blocks, and these blocks are collected by miners. Miners earn Bitcoin depending on how many they find and place on the public ledger. But like mining, these blocks are extremely hard to find. A miner’s computer constantly solves a complex computational math problem, where it comes up with a random 64-digit hexadecimal number called a “hash.” If it arrives at a solution that’s less or equal to a block’s number, then you’re lucky.
Take note that it takes a while for this number to be generated. But generally, the more powerful a computer is, the faster it creates hashes.
Beating the odds
Still, a more powerful computer doesn’t automatically guarantee a faster mine. For example, if we count how many times the number “six” will appear between a person with one dice and another with three, the odds are the same for each dice. The person with a single die can land on “six,” while the others won’t. You still need to be lucky. This is why mining is equally profitable regardless if you’re new or don’t have the money for more powerful equipment. A post on the history of luck by Gala Bingo states that it’s luck that lets people hope when the odds are stacked against them. After all, the world may seem chaotic and random, but luck ensures everyone has a chance.
Plus, while luck in Bitcoin mining can’t be manipulated, there’s a way to make a steady profit: join a mining pool.
Solo vs. mining pool
A mining pool is a community of miners who work together to search for blocks and split the profits. The Bitcoin amount you receive depends on the number of “shares” you contribute or the amount of processing power you used to form a block. If you were the one to find the block, your cut would be bigger, but then you’d have to share the profits with everyone else who helped.
Of course, if you have the equipment for it, you can always test your luck and solo mine. Each Bitcoin is worth $19,000. This year, you earn 6.25 Bitcoins per block mined (the value is halved every 210,000 mined), which should be around $119,000.
Just so you know, the current chance of mining a block with a single hash is 0.000000000000000000001498%. Finding even just one is akin to winning the lottery.
It’s no secret that Bitcoin mining operates mostly on luck with little skill. But you can increase your opportunities to hit the magic number with more powerful equipment. Plus, there are ways to turn the activity into an investment when you join a pool.