In November 2021, you can make about 6.25 BTC (roughly $382,786.875) from bitcoin mining. Clearly, it is still a very profitable enterprise. However, it has become harder to mine the crypto as the years go by.
For those who have the right tools, it is not as strenuous as it appears to novices. Like any other industry, it also requires dedication and hard work. Here is a simple breakdown of how it works.
How does bitcoin mining work?
The process has two primary purposes; to introduce new bitcoins into circulation and to verify transactions.
For those looking to mine new bitcoins, they are simply working to increase the number of the digital currency that is in circulation. The goal is to have about 21 million bitcoins in circulation, and as of September 2021, there are already 18.82 million of them.
While those mining to verify transactions are doing so to prevent the ‘double-spending problem.’ This is a phenomenon where a bitcoin owner spends the same bitcoin twice. It is a rare situation because it takes too much computing power or a gullible receiver. Yet, to be on the safer side, some miners are paid to do the work of auditors.
Note that the result of successful mining always leads to the creation of new blocks.
Most people are interested in bitcoin mining to increase their wealth, and we will, without delay, get into more details about this.
How can I make money from bitcoin mining?
As already stated, the biggest appeal in this industry is the wealth involved. Back in 2009, miners could earn as much as 50 BTC per block. This changed in 2012 after it was halved to 25 BTC. Again, in 2016, the reward was cut into two and became valued at 12.6 BTC. Then, in 2020, a block of bitcoin is now worth 6.25 BTC.
While the reward has clearly been halved steadily every four years, the value is steadily increasing as bitcoin continues to become more valuable. Also, as expected, with more value came more difficulty. Why?
To make money from bitcoin, you must be the first miner to arrive at the right answer or closest answer to the problem. This problem is a 64-digit hexadecimal number, called a hash, that is less than or equal to the target hash. Thus, you may arrive at the correct answer after working hard for weeks only to find that someone else (or a corporation) beat you to it already.
Related article: How to convert bitcoin to CAD, bitcoin to Euro, and more.
This was not usually the case in the early days because only a few people were interested in mining bitcoins. The case has now changed because more and more people are entering the industry. Large companies or several experts have come together to form mining centers.
It is proving more unlikely for individuals at home, using personal computers, to mine bitcoin successfully. This is why interested bitcoin miners are joining groups and companies. Of course, the proceeds of successfully mining bitcoin will be shared with the team as opposed to owning it alone if you worked solo. But, as already highlighted, the chances of succeeding alone are very slim.
Top 10 most successful bitcoin mining companies
Below is a list of the most successful bitcoin mining companies, mostly known as ‘pools’ in the industry. If you are looking to join any group that knows its way around mining, then this is the list for you:
This company posed the biggest threat to bitcoin ever when it gained control of 51% of the network. With such power, it could have rewritten the blockchain network and manipulated transactions how it saw fit. Thankfully, the miners were not interested in such abuse of power. Since then, it has dropped to owning about 1.9% of the network. Jeffrey Smith is the Chief Information Officer of the company and its public face.
9. 21 Inc.
With control of 3.79% of the bitcoin network, the company has been famous even before revealing that it was a bitcoin mining organization. In 2015, it raised $116 million and had notable investors throwing money at it, including Silicon Valley VC fund Andreessen Horowitz. It now touts itself as an organization looking to embed bitcoin network hardware into consumer goods.
8. Slush Pool
It is one of the oldest public mining pools, and it was founded in 2010 under the name Bitcoin Pooled Mining. It now controls 4.08% of the bitcoin network and is controlled by digital currency mega-company SatoshiLabs.
Based in Sweden and laying claim to 4.27% of the bitcoin network, KnCMiner sells bitcoin mining hardware. Owning one of the best hardware for mining positions it to be one of the leaders in the industry.
Founded by a Catholic by the name of Luke Dashjr, the company controls 4.83% of the blockchain. It is based in North America and is named after Saint Eligius – the patron saint of goldsmiths and coin collectors.
5. BW Pool
Being in the top five among bitcoin mining companies means a lot, and BW Pool is no slug. The Chinese-based pool is as secret as they come in the industry, and despite having 7.68% of the blockchain network under its control, it does not have a public presence outside of its home country. In 2015, it notoriously co-signed a Reddit post that asked for an increase in block size.
4. BTC China Pool
BTC China Pool is another Chinese mining pool that came on the scene in 2014 and already has a 13.74% share in the industry. It not only performs mining duties but also offers a bitcoin exchange platform.
Latvian Valery Vavilov runs the company that is touted as ‘the best-funded mining hardware company.’ As of 2015, it had raised $60 million in funding. BitFury has several private mines scattered across Europe, including in Finland, Iceland, and the Republic of Georgia. It has 16.4% of the bitcoin blockchain network cornered.
This is a bitcoin mining company nicknamed DiscusFish that is based in China. Its strategy involves bringing several users together to do its mining. This business plan appears to be working as it controls 16.49% of the blockchain network.
Bitmain, a Chinese mining hardware company, runs the most successful bitcoin mining company. The company itself, AntPool, was founded in 2013, and it owns 17.82% of the bitcoin mining industry. Bitmain sells mining hardware alongside its cloud mining service.
If you are looking to enter the bitcoin mining world, your best bet is to join any of these successful pools. Many of them are public pools and open to new miners. You will need mining hardware, own a bitcoin wallet and then take the necessary steps that these companies require. Also, you should be aware that you can opt to direct (route) your hashing power to different pools at any time.
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