Due to the possibility of mining, cryptocurrencies are often compared with precious metals or minerals. Mining of digital coins, especially Bitcoin, is a multi-billion dollar industry. In this article we will analyze what the complexity of mining depends on, find out what a hashrate is, and, of course, answer the main question: is it profitable to be engaged in mining in 2018? So, first things first.
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Blockchain consists of a chain of blocks found by miners. This is basically the process of mining new coins. To open a new block, miners have to solve a complex mathematical problem, after which they receive an award in the form of an unlimited number of coins. Each coin has a different reward.
The suppressing number of cryptocurrencies has a limited number of coins, for example, Bitcoin has 21 million coins. Initially, in the Bitcoin algorithm it was put that each new block is generated every 10 minutes, that is, the last coin will be mined not earlier than the year 2140.
At the very beginning the network of the participants was very small, so the complexity was minimal. But with the increasing popularity of the coin, the number of miners increased, and in order to keep to the schedule, it became necessary to take control of the pace of mining. The Bitcoin network reconsiders the complexity at intervals of 2016 blocks. If miners open them in less than 2 weeks, then the difficulty increases, if longer, then it decreases.
For a regular user, such words may seem like rocket science, but everything is not as difficult as it seems at first glance.
The network hashrate is the total computing power of all active miners. The more equipment is engaged in mining, the faster the problem will be solved, and the network, accordingly, will respond with an increase in complexity.
Each processor, video card, asic-miner, etc. has its hashrate (hash / second). Depending on the power of the equipment, this speed may differ, for example, an average video card can provide as little as 15-20 MH/s, and a specialized asic-miner 14-16 TH/s.
To know the complexity of mining, you need to know the hashrate of the network. In order to obtain this data, it is better to go to the official sites of coins or use third-party services that track these indicators online. But it is important to remember that such Bitcoin mining calculators are not always accurate, since the hashrate is a very dynamic indicator. In order to have a more accurate picture, it is better to collect data from different sources and determine the average value. Here are a couple of popular services:
As you can see on this graph, the hashrate of Bitcoin network is steadily growing.
As of September 2018, it is 53 exahash per second. This is a pretty large value, which, unfortunately, makes mining of Bitcoin absolutely unprofitable for most people.
Industry experts have calculated that the complexity of networks of popular coins is growing every month by about 7-8%. For this reason, starting to mine cryptocurrencies with high complexity in 2018 is not really profitable.
There are several options:
- Invest a large amount of cash in equipment. This will increase the share of reward, but it’s not a fact that it will pay the money invested, as due to the constant increase in complexity, calculating machines can become almost useless. In case of increased complexity even the acceleration of the video card for mining will not help, as it gives insignificant increase.
- Expand mining of unknown coins, which does not require large capacity. This option is also quite risky, since there is a possibility that this cryptocurrency will not increase in price.
- Mine the coins that are already widely known, but their complexity has not yet grown to enormous values. For example, Dash, BTC Cash, Monero, Litecoin, etc. In terms of risk/profit ratio, this is the most optimal and balanced solution.
The constant increase in the complexity of networks of popular coins, unfortunately, makes their mining an absolutely unprofitable business for the majority of people. In order to succeed in mining, you must always keep an eye on the hash rate and be able to move the focus on the extraction of another coin in time.
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