Hi friend! With Bitcoin continuing to dominate the cryptocurrency industry, many people have been curious about how many new bitcoins are mined each day in 2024. Approximately 900 BTC are generated per day currently, but understanding how we arrived at this level requires a deeper look at Bitcoin‘s ingenious reward system for miners.
First, let‘s quickly review the essentials of Bitcoin mining. In order to secure the Bitcoin network and process transactions, specialized computers called miners compete to solve complex cryptographic puzzles and verify new blocks of transactions. These miners expend significant computing power (known as hashrate) in a kind of computational race to be the first to find a valid block and get rewarded with newly minted bitcoin.
Bitcoin‘s inventor Satoshi Nakamoto designed the mining reward system to be a predictable, diminishing bounty to both incentivize miners and cap the supply of Bitcoins at 21 million. When Bitcoin first launched in 2009, the reward was set at a generous 50 BTC per block. But after every 210,000 blocks mined or approximately every 4 years, this mining reward gets slashed in half during an event called the "halving". There have been three halvings so far:
- November 2012 – Mining reward reduced from 50 to 25 BTC
- July 2016 – Mining reward reduced from 25 to 12.5 BTC
- May 2020 – Mining reward reduced from 12.5 to 6.25 BTC
Given that a new block is mined roughly every 10 minutes, the current reward of 6.25 BTC per block works out to approximately 900 BTC ($19,350,000) being generated daily as of 2024. However, after the next halving expected in 2024, the daily bitcoin output will drop to around 450 BTC. In total, there are at most only 21 million bitcoins that can ever be created.
Now let‘s look at how the mining difficulty has changed over time. As Bitcoin‘s value has skyrocketed, more miners have joined the network competing for the block rewards. The chart below illustrates the rapid growth in the collective hashrate applied to mining, reaching over 250 exahash per second (EH/s) in 2024 compared to just 7 EH/s five years ago!
[Insert Chart of Bitcoin Hashrate Over Time]To keep the block generation time at 10 minutes, the Bitcoin protocol autonomously adjusts the mining difficulty every 2016 blocks based on the hashing power. The more power in the network, the higher the difficulty becomes, as we can see in the chart below.
[Insert Chart of Bitcoin Mining Difficulty Over Time]What does this mean for miners today? With the hashrate so high now, it is extremely difficult for amateur miners to profitably compete using standard hardware. Specialized high-performance ASIC miners are a must, but even then, profitability ultimately depends on the cost of electricity and Bitcoin‘s notoriously volatile price.
Let‘s break down the rough economics for an example miner with 100 TH/s of hashing power based on February 2023 figures:
-
Revenue: 900 BTC mined per day * $22,000 BTC price = $19.8 million per day
- With 100 TH/s, will mine ~0.04% of blocks so: 0.04% * $19.8 million ≈ $7920 revenue per day
- Operating Costs: 100 TH/s 650 W per TH/s 24 hr/day * $0.05 per kWh ≈ $780 per day
- Profit: Revenue – Costs ≈ $7140 per day
However, if Bitcoin‘s price were to fall to $15,000 for instance, the profit would drop down to around $3560 per day for the same 100 TH/s miner. When factoring in hardware investments and upgrades required periodically, profitability can be even thinner for individual miners.
That‘s why the majority of ordinary miners participate in mining pools rather than solo mining. By combining their hashing power and sharing block rewards, pools help miners get more steady payouts. The three largest Bitcoin mining pools – F2Pool, Poolin, and AntPool, all based in China, control over 50% of the total hashrate currently.
Speaking of location, the distribution of global Bitcoin mining power has shifted considerably over the last few years. China long dominated with over 75% of mining, but after the nationwide crypto mining ban in 2021, the U.S. emerged as the new leader with about 35% hashrate. Some other top mining countries today include Kazakhstan, Russia, Malaysia, and Canada.
Bitcoin miners have faced scrutiny over the years for the massive energy consumption required. The latest estimate is that the global Bitcoin mining industry uses around 110 terawatt hours per year – more than some small nations! However, miners have incentives to utilize cheaper, renewable sources where possible. A 2022 study revealed that nearly 60% of the energy mix powering Bitcoin mining is from renewable sources.
The ecological impact of crypto is still hotly debated though. Going forward, wider adoption of more energy-efficient mining chips and liquid cooling could help improve Bitcoin‘s carbon footprint. Fortunately, miners have nearly two decades before rewards fully disappear to continue optimizing their operations.
When the 21 millionth bitcoin is finally mined close to the year 2140 based on projections, miners will rely entirely on income from transaction fees rather than block rewards. Some speculate that miners may consolidate into larger centralized operations to remain profitable when rewards run out.
Others argue that the risk of losing massive transaction fee income will deter miners from manipulating or attacking the network. In any case, Bitcoin‘s incredible mining reward structure will have served its purpose by then in slowly distributing coins to those who most strengthen the network. Amazingly, the current system already secures over $400 billion in wealth using less power than some Christmas lights!
So in summary, about 900 shiny new bitcoins are mined per day in 2024 – a tangible representation of the tremendous computing power dedicated to keeping Bitcoin running smoothly. This will only decrease over time as Bitcoin stays true to its fixed supply schedule aiming to issue the very last satoshi sometime next century!
