What is Mining?
Mining is a common name for mining cryptocurrencies such as Bitcoin. Mining Bitcoin is like solving a math problem, whoever solves the problem first gets the reward.
So the whole process of solving and verifying is called mining, and the rig which assists in cracking the digital answer is called a worker.
At the beginning of the birth of Bitcoin, ordinary computers can carry out mining operations, and it is easy to mine a block by an individual. However, the hashrate of ordinary computers is not enough to mine out blocks. The reasons can be attributed to the development of Bitcoin, difficulty adjustment mechanism on 10 minutes basis as well as continuous improvement of the hashrate of the whole network. Therefore, the status derivatives a more powerful professional miner, which is the ASIC miner. However, the hashrate of a single ASIC miner is still scant. In the face of the ever-increasing hashrate, the mining pool as a centralized miner's hashrate has gradually emerged.
How to Gain Profits by Mining?
The miner's mining process is a process of synchronizing historical ledger by running Bitcoin nodes, recording the latest transactions to the ledgers, and obtaining Bitcoin block rewards. For Bitcoin network, miners maintain Bitcoin network security by means of mining. For miners, they obtain reward through mining. At current stage, the reward of Bitcoin block is 6.25 Bitcoins.
Mining is a proof of work (PoW). Proof of work calculates a nonce, which leads to the hash value calculated after including the transaction data satisfies certain limit. After nodes successfully find the satisfied hash value, it will broadcast immediately. If the verification is passed, it indicates that the node has successfully solved the problem, and instead of competing for the current block packing, it chooses to accept the block, record it in its own ledger, and then conduct the competition quiz for the next block. In the network, only the fastest problem-solving block can be added to the ledger meanwhile other nodes are replicating, which ensures the uniqueness of the entire ledger.
Is hashrate proportional to mining profit?
The relationship between hashrate and mining profit:
- In the case of the same difficulty, the higher the hashrate, the higher the mining profit.
- Bitcoin makes a difficulty adjustment for each of the 2016 blocks in about two weeks. It is likely to get lower profit with higher hashrate when difficulty increases.
- Block reward of Bitcoin halves on four years basis, during the period of halving the reward, the profit of users is also halved.
Formula between hashrate and mining profit:
Mining profit on a daily basis=hashrate*24 hours (86400 seconds)*block reward(6.25 Bitcoins)/(network Difficulty*2^32)
Please utilize tools in Poolin: Mini Mining Profit Calculator ( If you need to calculate mining profit)
What kinds of miners are currently available?
Bitcoin mining has fully entered the era of mining by technical miners (ASIC Mining machine). Currently, mainstream miners manufacturers include:
- Bitmain Antminer
What is pool fee?
Mining pool fee is the technical service fee paid by miner to mining pool. Payment methods include PPS, PPLNS, PPS+, FPPS, SOLO, etc.
Transaction fee or miner's fee refers to the fee paid to the miner when the user initiates the transaction, as the labor income of the miner mining.
Taking Poolin pool fee as an example:
- BTC: 2.5% FPPS
- BCH: 4% PPS
- BSV: 3% PPS
- LTC: 3% PPS
- DASH: 2% PPS
- ETH: 1% PPS+
- ZEC: 3% PPS
- DCR: 3% PPS
- ZEN: 0% PPS
- CKB: 1% PPS
*Settlement is proceeded on daily basis.
*The calculation method of pool fee is the overall handling fee rate of the mining pool. The actual income should be based on the actual mining profit.