The big secret at the heart of Bitcoin mining

PwC blockchain specialist Alex de Vries has found that only around two percent of BitcoinBitcoin miners will ever discover a block.

In a recent interview with British news outlet The Telegraph, de Vries said that 98% of Bitcoin mining rigs never participate in the transaction validation process. This is where specialized computers, known as miners, compete to crunch cryptographic problems to discover new blocks in the chain.

Upon discovery of a block, a total of 12.5 Bitcoin (BTC), worth around $110,000, are minted and rewarded to the miner, making mining a lucrative investment option for those with the capital to buy high-end mining equipment. However, those with less powerful equipment are much less likely to successfully discover a block and earn this reward.

“That means it’s impossible for 98% of the devices during their lifetime to make the calculation that actually results in a reward. So the rest are just running pointlessly for a few years, using up energy, and producing heat," said de Vries.

The other side of the Bitcoin

There are two sides to this story. While few Bitcoin miners get to take the credit for mining the block, the rest of the miners are still contributing.

The vast majority of Bitcoin miners work as part of large mining networks known as pools. These let miners pool their mining power together to stand a better chance at discovering the next block. Once someone discovers a block, the rewards get shared among everyone in the pool.

To be more specific, each set of miners in the pool will try different numbers in the hope of finding the golden ticket. By working together, they have much greater chances. If they weren’t to work together, then they would likely be wasting their time.

Although, plucky miners have gotten lucky before.