Photo courtesy of Brekkie von Bitcoin.
The inspiration of this article comes from spending a weekend with Nick Foster.
Over the past few years, there has been an incredible amount of interest dedicated toward the bitcoin mining space. It is apparent that many interested parties lack the understanding of how difficult it is to be a participant in this industry, and the amount of work that goes into plugging in a machine so that it begins hashing. This lack of understanding can be attributed to a general disconnect from the complexities of the entire process, because you cannot truly understand it until you try it. What I would like to convey in this article is how much work is necessary in order to build the infrastructure needed to process a Bitcoin transaction.
To be successful in this industry, you need to have some sort of edge over the competition. One such edge is being a maniac. Just passively strolling onto the scene with a “How hard can plugging in computers be?” attitude will not cut it. Having access to capital is not a guarantee that you will make it.
This market is incredibly difficult not only from a Bitcoin-economic standpoint, but also a manpower, hardware, regulatory and logistical standpoint. Difficulties have been massively exacerbated by current supply-chain and manufacturing complexities. Mining is not for the faint of heart, and to be successful in the business you have to be relentless.
Proof Of Work
Bitcoin wants the highest possible amount of effort expended to create the most security for the network. The network needs this to counter bad actors. That being said, increasing network hash rate is a tremendous amount of work just in and of itself.
A petahash consists of about 10 S19s and an exahash is about 10,000 S19s. So, looking at a network hashrate of 200 EH, that means — translated in S19s as a measurement — that there is an equivalent of two million S19s currently plugged in. 312 S19s comes out to a megawatt, so that means that…
