In the Bitcoin network, a miner’s goal is to add individual blocks to the blockchain by solving sophisticated mathematical problems. This requires enormous computational and electrical power.While many miners compete to add each block, the miner who solves the problem will add the block, along with its approved transactions, to the blockchain.
Bitcoin is designed to adjust the difficulty required to mine one block every 14 days . The overarching goal is to maintain the time required to mine one bitcoin to 10 minutes. Since Bitcoin has been around since 2009, its mining difficulty is currently extremely high, which is why resource-intensive, powerful hardware is required to mine it.
You’ll also need to choose Bitcoin mining software to join the Bitcoin network but this isn’t nearly as expensive as hardware. There are even mining software for free online but it’s best to get a more reliable software that will cost between $100 to $3,000. In Nigeria, according to an inquiry made by Nairametrics from an Ikeja Electric staff, a Class A tariff that provides 20 hours of electricity a day would cost 57.10 per kilowatt. If these two facts are taken into account, the total cost of electricity to mine a Bitcoin in Nigeria would amount to approximately 88,000.
The mining rig, software, generator and other ancillary cost shows how capital intensive mining can be. These costs are enough to think twice about the mining business and another cost which may seem insignificant but very vital is internet speed. Mining is like a competition between different miners who want to earn a commission on mining the block. Without good enough internet speed, the rigs and software become useless and good internet speed in Nigeria is hard to come by.
To mine a Bitcoin worth $32,000 as of today will not yield so much return on investment. Especially when considering other costs like rent and human capital needed to monitor the machines.
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