Evolution of Bitcoin Mining

I have mentioned several times that approximately every 10 minutes a new block is mined, which adds new bitcoins to the system. But how do we know that it will take miners exactly 10 minutes to find the “winning” number?

In reality, we do not know this precisely.

From laptops to ASIC miners

When Bitcoin was first created, it was mined using ordinary laptops and desktop computers. However, people soon realized that the faster they could search for the correct number, the higher their chances of winning.

This led to the idea of mining Bitcoin using graphics cards (GPUs). Graphics cards provided significantly higher computing power and were much more efficient for mining.

Later, graphics cards were replaced by so-called ASIC miners (Application-Specific Integrated Circuit).

An ASIC miner is a device specifically designed solely for mining Bitcoin and cannot be used for anything else. Because it is optimized exclusively for this single purpose, its performance is many times higher than that of ordinary computers or graphics cards.

Difficulty adjustment

But how can we ensure that bitcoins are not mined too quickly? Satoshi Nakamoto thought of this as well.

Bitcoin’s algorithm includes a built-in mechanism for adjusting mining difficulty, known as difficulty adjustment. Every 2,016 blocks (approximately every 14 days), the network automatically adjusts itself based on how quickly blocks were found during that period.

If blocks were found too quickly, the algorithm increases the difficulty. If blocks were found too slowly, the algorithm reduces the difficulty.

How does this work in practice?

Bitcoin adjusts the difficulty by modifying the required hash – that is, the number that miners must find.

If blocks were mined too quickly, the system increases the difficulty by adding more leading zeros to the hash, which significantly increases the number of possible combinations and slows down mining.

If blocks were mined too slowly, the system lowers the difficulty by reducing the number of required leading zeros, thereby decreasing the number of combinations that miners need to try.

Thanks to this mechanism, Bitcoin consistently maintains an average block interval of about 10 minutes, regardless of how many miners are in the network or how powerful their equipment is.

The more miners that join the network, the more secure it becomes – because any potential attack would require an even greater amount of computing power.

If someone attempted to manipulate the blockchain, they would need to overpower the entire network, which is practically impossible given the billions invested in mining infrastructure.

Hash rate and network security

You can check the current mining difficulty and thus the security of the network at any time online under the term Total Hash Rate.

Today, this value is expressed in TH/s (terahashes per second) and represents the total computing power of all devices participating in the Bitcoin network.

Is it still worth mining Bitcoin?

On a laptop or a standard desktop computer, definitely not.

Bitcoin mining today is a highly professional industry, where the key factor for success is the price of electricity.

That is why many miners relocate to regions with cheaper energy. Bitcoin is often criticized for “wasting” large amounts of electricity and harming the planet.

I respectfully disagree with this view. First of all, this energy is not wasted – it is precisely this energy consumption that makes Bitcoin secure and freely accessible to people all over the world.

Secondly, miners are driven by profit, which naturally pushes them to seek the cheapest available energy sources. For this reason, they often focus on renewable energy.

Thanks in part to miners, new hydroelectric, solar, and wind power plants have been built around the world. Miners are highly inventive.

One innovative approach is the use of excess natural gas at oil extraction sites. During oil production, gas is often flared or released into the atmosphere, which is environmentally harmful. Bitcoin miners, however, use this gas to power their mining equipment, reducing emissions and making efficient use of available resources.

Paraguay and cheap energy

Paraguay is another example of efficient energy utilization for Bitcoin mining. The country owns one of the largest hydroelectric power plants in the world – Itaipú.

This power plant produces more energy than the population of Paraguay can consume. Instead of selling the surplus energy at low prices to neighboring countries, Paraguay welcomed cryptocurrency miners, who use this energy for mining.

This increases domestic energy consumption, stimulates the economy, and creates new jobs.

Mining pools and Marek “Slush” Palatinus

The answer to the question of whether it is still worth investing in Bitcoin mining today is not straightforward. For individuals with ordinary computers, mining no longer makes sense.

However, for those with access to cheap electricity and specialized hardware, it can still be profitable.

A major breakthrough in mining was achieved by Marek “Slush” Palatinus, a Czech programmer and entrepreneur, who created the world’s first mining pool – Slush Pool (now known as Braiins Pool).

Mining pools allowed miners to join forces and share rewards based on the computing power they contributed.

Thanks to mining pools, mining became more accessible to smaller participants and helped increase the decentralization of the network.

Because mining pools aggregate a vast number of miners, Bitcoin has become more resilient to potential attacks.

Braiins Pool is currently one of the leading mining pools in the world and a technological leader in the mining industry.

Thanks largely to Marek Palatinus, Bitcoin mining has become more professional and has evolved into a more stable industry.