How Does Bitcoin Mining Work? What about crypto mining meaning?
Introduction
Minto uses its own data center to simplify the mining process into 2 steps: purchasing BTCMT tokens and staking them. The current project hashrate is 50 000 TH/s and every 100 BTCMT is equal to 1 TH/s of operating mining power. This article shows you the mining process and the benefits you can have from Minto.
ASIC miner. Its specifications and usage
In 2013 it was possible to mine Bitcoin at home with your home PC. Now it’s not. You should have high specialized computers for it — ASIC miners. Simply put, it’s a complicated device that uses chips designed exclusively for a set of mining algorithms. Like the SHA-256 algorithm for mining Bitcoin.
Their main specifications are:
- Mining power (TH/s). The higher mining hashrate, the more rewards you will get in the same amount of time. For technical reasons, the real hashrate of miners may vary by 5–10% compared to the manufacturer’s number;
- Electricity consumption (W). Main expenses of miners. Miners should work fully loaded and 24/7;
- Energy efficiency (J/TH). It’s a miner’s electricity consumption compared to its performance. The lower the efficiency, the more you will pay for electricity from your mining rewards.
If you want to avoid major unexpected troubles, you should consider these points before purchasing crypto mining hardware:
- Logistics from China;
- Paying taxes, duties and fees;
- Electricity chain and equipment supplies that can handle 3500–5000W;
- Maintaining plan: being sure that miner is operating 24/7 and 100% efficient;
- Ways out. Considering all the risks as regulation or rate falls and opportunities to sell your equipment to minimize losses.
Neglecting these factors may not only decrease your rates of return, but can cause significant losses. For instance, you can be not aware that your miner is giving you 10% less because it was not set up correctly or mining can become illegal like it was in China. There are dozens of risks on every step.
Mining pool
To get a Bitcoin, a miner should solve a puzzle generated by Bitcoin’s algorithm. It’s called a mining reward. The higher the mining power, the higher the chance to find a solution. There are several millions of miners around the world operating at the moment. For the beginning of 2022, using the mining power equal to ~$15000, statistically, you will get your first reward in ~30 years. That’s why miners create pools. A mining pool is a network where miners cooperate to find a solution and share the rewards depending on their contribution. There are 10 major international mining pools:
Our miners are running in F2Pool which is the third-largest mining pool in the world. Its hashrate is around 26 000 000 TH/s which is around 300 000 operating miners. It allows the pool to get hundreds of bitcoins daily and to share them between miners.
F2Pool made ASIC hardware of Minto available to monitor on their website. BTCMT holders can:
- Monitor their hashrate is operating 24/7;
- The amount of the project’s hashrate is equal to 50 000 TH/s;
- History of daily mining rewards the project gets.
What affects your mining rewards?
You wake up and see your daily income different from what you’ve got for the previous day. Let’s explore what can be the reason.
Bitcoin network hashrate
Overall Bitcoin mining power operating to get bitcoin mining rewards at the moment. It affects miners’ chances to get a reward. More miners = same reward = less chance of getting a reward. It also affects mining difficulty.
Bitcoin network difficulty
The amount of calculations to get the same mining reward. In the blockchain of Bitcoin, it changes once in around 2 weeks depending on the Bitcoin network hashrate. The higher the difficulty — the lower your reward from the same amount of mining power. And it grows constantly unless no force majeure happens (like a mining ban in China).
Hashrate jumps
No computers are ideal and miners are not an exception. The daily hashrate of ASIC miners can vary on 5–10% of factory specifications. It means if you can’t treat hardware correctly, you may lose your income every day.
Minto runs its miners in an enterprise-level data center with in-house-written software and a team of engineers monitoring and maintaining it 24/7. It’s a huge pain to do it for a home miner if it’s not your only activity and every penny becomes more significant especially if you scale.
Bitcoin exchange rate
A critical mistake is to underestimate how the difference in calculation units may affect your rewards. There are 3 points you should consider:
- The price you will sell your rewards. Higher rate = higher amount of USD for the same amount of BTC.
- Electricity price. There are no power plants accepting payments in crypto, right? The lower the Bitcoin exchange rate, the more you should convert from your reward to pay for electricity.
For instance, ASIC miners of Minto consume electricity for around $4072 and get 0.3 BTC daily. Let’s compare electricity costs for 30000 BTC/USD rate to 60000 BTC/USD rate:
Yeah, it hurts
3. It affects the Bitcoin network difficulty. It’s kind of a hunger game: those who use expensive electricity should turn off their devices because electricity payments become higher than mining rewards. Less devices — less difficulty. Balance!
How can I get rid of risks? It’s too much
There is no way and if someone tries to convince you in the opposite — he lies. But you can minimize them. That’s one of the reasons Minto put the real mining process to DeFi. Every BTCMT token is a 0.01 TH/s of actively operating hashrate mining Bitcoin in an eco-friendly data center. So 11000 staked BTCMT tokens are equal to operating Antminer S19 Pro. Every day we get a mining reward from tokenized 50 000 TH/s, convert a part of it to pay electricity bills, and share the income between those who staked.
There are huge benefits of sticking to DeFi mining:
Starting with mining hardware is painful. Starting with Minto are 2 steps: purchasing and staking. Do your own research and purchase BTCMT if you’re ready!
Ask anything about mining or the Minto cryptocurrency mining platform in our Telegram chat!
