17 What is a Miner?

Bitcoin Bottom Line

Host C.J.Wilson goes solo for a short informational episode answering the question, “What is a Miner?”

Wilson explains that a “miner” is an “asic”, and shows what one looks like in the video version of this episode (on Youtube). It’s a 30 pound shoe box shaped machine with fans and plugins that connects to your laptop.

After purchasing the asic, the next step is joining a mining pool. A mining pool is a group of computers that all work together to share the hash rate. The brand new miners are usually somewhere between 90-110 terra hashes per second, which is a computing speed measurer.

For every 100 terra hashes, you are averaging around .02 bitcoin per month, in terms of how much you will actually win.

There are competing pools that are headquartered in different countries, many of which have been around for about 10 years allowing people to share the winnings. Every ten minutes or so, a block is mined and the winner gets 6.25 bitcoin. So, if you are participating in that pool, you will get your share of whatever you’re putting in the network financially or hash rate wise.

If you were mining with just one asic on your own and not using a pool, you will have a statistically near impossible chance of winning a block. This is because there are so many miners competing.

Wilson explains the conversation around how much energy bitcoin uses, and how much of it is calculated based on the hash rate. However, each machine has a different electrical efficiency- the watts to terra hash ratio has changed over time and throughout the different generations of machines.

As electricity prices change, the miners have to figure out how they will be profitable with the source they are using. He goes on to explain how co-location services work and how these benefit miners.

There is more competition for mining as bitcoin has gone up, causing people to come up with innovative ways of accessing power. One of these ways is using waste fuel. There are farmers extracting the methane from animal waste to convert to electricity. There are others converting natural gas, which might normally be burned, into energy to mine.

Wilson goes on to explain how immersion works, preserving the life of the miner and increasing efficiency.

States like Wyoming, Texas, Nebraska, Pennsylvania, New York might have an energy source that they don’t know what to do with, and bitcoiners are willing to take whatever power they can get and they scale their operations onto that. With bitcoin trading 40, 50, 60 thousand dollars this past year, it’s a really lucrative time to be a bitcoiner.

Listen to the full episode for more!