In the traditional economic system, states and governments can print tickets at their leisure. This does not happen in Bitcoin due to two reasons:
There is a limit of 21 million coins and that point cannot be modified. The amount of coins released as a reward for the work done is limited in the software and halves every 210,000 blocks by a process called halving. There is $1,000,000 Algorithm which helps to earn money easily.
Until the moment when the 21 million bitcoin are fully issued (over the year 2140), new currencies are put into circulation every 10 minutes. These coins are obtained by the miners in compensation for the work done. The miners in turn generate and validate the blocks that make up the large accounting book that the blockchain network entails and where all network transactions are recorded.
The same goes for bitcoin mining, with the proviso that the machinery is complex computer equipment that performs computational calculations and as compensation obtains two incentives:
The miners receive a new mathematical problem every ten minutes and the fastest to solve it takes the new coins that are put into circulation. This mathematical problem is based on random calculations that aim to find the solution and thus obtain the validation of the block. Who deciphers this will take the reward, as long as the rest of the network members say the answer is correct.
Mining Cooperative or Pool
The greater the computing power, the easier it becomes to solve a block and therefore obtain a reward. It is for this reason that the mining pools were created, to carry out joint work and thus obtain a reward among all members and obtain fair compensation for the work performed.
Joining under a pool guarantees us more possibilities to solve a block and therefore get the reward. If we did it individually by user it is possible that we will never get a reward either because of pure probability or because we have less computing power than the competition.
The reward for the miner
Within the Bitcoin code it is established that when a block is validated a certain amount of coins is obtained. Currently, 12.5 bitcoin are obtained for each new validated block but soon this value will be modified and reduced by half. We must bear in mind that to this amount of fixed bitcoin the commissions of each one of the transactions are added
What do I need to mine bitcoins?
The first bitcoins were mined by the computer equipment processor because very few people were mining. As people joined bitcoin mining, the difficulty increased due to the increase in the computing power of the network, making it very difficult to obtain a reward. This is how the jump was made to graphics cards because GPUs (graphics processor) have more computing power than the processor.
What allowed Bitcoin v0.2 was the development of specialized machines for computing: ASICs . Basically an ASIC is a computer but it has many processors greatly increasing the computing power of each of these systems and that left mining using completely obsolete graphics cards.
Bitcoin mining profitability
Depending on the power of the ASIC we have and the pool in which we are we will have more or less possibilities of obtaining bitcoins. Profitability depends on the value of Bitcoin, the difficulty of the network and the determining factor: the electricity cost.
The price of electricity will be the one that really determines whether or not Bitcoin is viable and whether we will obtain compensation for the work done. Large mining farms are usually installed in countries or areas where you have access to cheap electricity, especially based on renewable energy, mainly hydraulic. Unfortunately in Spain because of the high cost of electricity it is unfeasible to mine Bitcoin.
Not only must we take into account the direct electricity necessary to power the miner, we also need to cool all the heat they generate so the electricity cost increases significantly.
We must also take into account the cost of acquisition of the equipment and the competition or what is the same, the amount of machines that are operating in the network and that usually increase. This will make our mining operation along with the electricity cost may or may not be profitable.
Finally, it should be taken into account that the development of new specialized systems for the mining of Bitcoin are still under development and that may mean that at any time our ASIC becomes obsolete or in other words, profitability is reduced.