I hope this is the right place to ask this. If there are thousands or even millions of miners and an actual block is beeing mined or added to the blockchain every 5 to 10 minutes. And when it happens all the other miner blocks are rejected and they start all over. How is it profitable for some1 to start mining? There must be a huge number of miners who never actually add a block to the chain and make a profit. And on the other hand there must be a top 10 of miners who have super duper fast strong and capable Computers and they win the puzzle game all the time. Is this so or there is something deeper here?
It is very unprofitable to mine by yourself and almost no one does it. If you are a small miner you would want to join a mining pool. If you check the block explorer you will notice that most of the blocks that are mined are mined by a pool and rarely you will see a unknown miner. Mining pools share rewards. If there is 10 people in a pool and someone in that pool finds a block they split their reward based on the hash they contribute. Let’s say each of them contributed the same amount of hash power that would be 12.5 divided by 10 so each person in that pool would get 1.25 bitcoin as a reward. Hope that helps you out.
Yes, thank You! It makes a lot more sence now
I worked for one of North America’s largest crypto mining companies and this is exactly accurate. Even though we are considered a “big player” we still joined a pool.
The only thing I’d add is that those in the pool pay a small percentage to the mining pool operator for the service they are providing (aggregating hashpower and dealing with payouts, etc.).
Yeah forgot about that. Thanks.
Should there be a limit of how big a mining pool can become to prevent centralisation?
Also 1 of my concerns is the advantage that hardware manufacturers have. While reading your post I was Googling some more about it, and I found a great article of Jimmy song.
If you are a miner, you likely believe in the “crypto ethos”. Should there ever be a 51% attack on the network, it would be pretty catastrophic for the price of BTC and alts (which are all quite correlated to BTC price movements).
If you’re a big player in the mining space, I can guarantee you are doing everything you can to protect your investment and to maximize profits going forward. If there is any nefarious activity within a pool or mining hashrate is approaching 51%, I’m confident many miners would just switch to another pool.
I’ll read the article you posted, maybe there are some potential threats I’m unaware of.