Bitcoin Mining Explained

Unlike trading bitcoins, mining is an activity that is fairly unknown to the general public. Yet it matters, because it is through mining that the transaction network is secured and that bitcoins are issued.

What is Bitcoin mining?

It is an activity that validates a transaction on the blockchain network (the equivalent of a large ledger of accounts) through a mathematical computation, in exchange for a reward in cryptocurrency.

Over time, these computations have become harder and harder to solve. They now require machines with a great deal of computing power.

Gone are the days when you could mine alone at home with your computer. Today, miners are organized into pools. Together, they combine their computing power to validate blocks and share the mined cryptocurrencies in proportion to their hash power.

Miners also collect transaction fees each time a transaction is made. The faster the transaction, the higher the fees, and vice versa.

A few figures from the Bitcoin network

• 1 block validated roughly every 10 minutes
• Reward: 6.25 bitcoins per block
• Every 2,016 blocks, the mining difficulty per block is re-evaluated and readjusted. The more miners there are, the higher the mining difficulty.
• Next halving (rewards cut in half) in spring 2024
• More than 19 of the planned 21 million bitcoins have been mined.

Mining machines (ASICs)

ASICs (Application-Specific Integrated Circuits) are machines designed specifically for Bitcoin mining. They are increasingly powerful and expensive. Their lifespan is around three to four years and depends on the conditions in which they are used.

For mining other cryptocurrencies (altcoins), the machines used are rigs (also called GPUs — graphics cards that are not necessarily dedicated to mining).

ASICs, like rigs, are vulnerable to dust and heat. That is why it is important to host them in good conditions. An effective cooling system and filters are essential to keep the machines in good working order.

The Startmining experience

At Startmining, we operate bitcoin mining on behalf of our clients. Thanks to our expertise, we handle every step needed for mining operations to run smoothly:

• the sale and assembly of the machines,
• shipping and installing the machines in our mining farms,
• monitoring and maintenance,
• tracking and monitoring of operations.

Startmining supports you with your mining project. We also handle relocating your machines under certain conditions. Feel free to contact us — we would be glad to discuss the feasibility of your project and how we can set it up with you.