On 3rd January 2009, the first Bitcoins were mined.
Mining is the process where computer hardware searches for a solution to a mathematical problem. This helps to secure the network and the first miner to solve each problem is rewarded with Bitcoins.
A difficulty level is set which should result in one problem being solved (a block being mined) every 10 minutes on average.
Back in the early days, mining took place on CPUs, and the first miner was Satoshi Nakamoto who likely had a a number of computers dedicated to the task.
While currently at 103,880,340,815, the mining difficulty began at 1. Without the vast infrastructure that now supports the network, things were a lot more unpredictable. Despite starting so low, this was still too challenging for the hardware on the new network to achieve its 10 minute target and a problem was solved roughly every 17 minutes.
In November, I bought an Antminer U3 for $29 which can perform 63GHs. This uses a specialised ASIC chip instead of a more general use CPU and means it can attempt to solve the problem 63,000,000,000 times per second.
That sounds like a lot, but is actually pathetically small. Currently there is 786,979,397GHs of total processing power on the network. Multiplying this by 600 tells us how many times the lottery must be entered on average before a winner is found. If your brain can handle this many numbers, every 10 minutes there are 472,187,638,200,000,000,000 attempts to solve the problem and only one is successful. For perspective, if the network didn’t get any more difficult, it would take me on average 224 years to solve this problem alone with my device.
So what would have happened if I had been able to harness this $29 worth of power on the network in 2009, with a difficulty of 1? The reward back then was 50 Bitcoins.
- Instead of taking 224 years to solve a block, it would take 0.07 seconds.
- It would have taken just over 2 minutes (137 seconds) to solve the first 2016 blocks instead of the targeted 2 weeks.
- After those 2016 blocks the difficulty would recalibrate itself and take an average of 10 minutes to solve each block, but I would win every single block for the foreseeable future.
Of course, if this happened, the Bitcoins would be completely worthless, but at their current value of $430 how much would I have mined?
In January 2009, my $29 (in 2015) device would have mined $41.6 million dollars of Bitcoin in little over 2 minutes. Not bad.
To mine the same quantity of Bitcoins starting now, if difficulty stayed the same, would take 903,168 years. Ouch.
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