People who are familiar with the world of cryptocurrencies have repeatedly heard that it is necessary to use more powerful equipment every year to earn profits from the mining for profit. This is due to the need to upgrade mining capacities at the same pace as the complexity of the cryptocurrency extraction process increases. Many users who are not familiar with this concept may come to a loss, as the difficulty of extracting a digital currency is increased not in the traditional sense. The complexity of mining is a unit of measure indicating the complexity of discovering a new hash below a specified level. A similar notion is found not only in the Bitcoin network but also in a number of other virtual currency Blockchains, where the process of mining is performed using “evidence of performance” algorithm.
The complexity of cryptocurrency mining
Everyone, who intends to proceed with the mining of the Bitcoin digital currency or any other altcoins must be informed about the process main concept. The most important parameter while mining a digital currency is the difficulty of extraction. Despite the fact that this parameter does not affect the process of mining itself, its complexity increases every year.
What affects the complexity of mining
If we consider the complexity of mining, then it can be established that several factors simultaneously influence this unit of measurement. The first, and most significant, is the presence of a global block complexity, which depends on whether the valid hash block is below the specified level. The second, but not less significant, parameter, affecting the complexity of mining, is the number of people engaged in the extraction of one or another virtual currency. The third parameter affecting this unit is the extraction complexity, which is established directly by the mining pool. The last parameter can be different for each individual digital currency.
In the Bitcoin network, the complexity of the production of cryptocurrency is corrected automatically after the production of 2016 blocks by the miners. The change in complexity depends on how many miners were engaged in the extraction of digital currency, as well as on the amount of time spent on producing a specific number of blocks. Depending on these parameters, the complexity of the mining may change to a greater or lesser extent. If the level of complexity for mining increases, miners need to use equipment with greater capacity. This will allow them to adapt to the new network conditions.
That is why mining with the help of video cards and CPU was left in the past together with the arrival of ASIC circuits on the market.
In addition, it should be noted that the complexity of mining within the Bitcoin network can increase indefinitely. There is a certain probability that the complexity of mining will increase until the last Bitcoin token is received. At the same time, the rate of increase in complexity can also increase. As of today, increasing the level of complexity of coin mining within the Bitcoin network has reached such a level that obtaining each new coin takes a long time and requires very powerful equipment. This has become a critical factor for many digital currency earners, since not every miner can afford to purchase expensive equipment or upgrade an old one.
Despite the fact that the complexity of Bitcoin digital currency may go down, such an event will occur no more than twice a year. In practice, you can see that increasing the complexity of extracting a virtual currency has a steady trend. Beginning from July 2015 to the present day, the complexity of Bitcoin coinage was reduced only five times.
The complexity of extracting a virtual currency is a very important value, which every beginner must take into account. Together with the discovery of new blocks and the influx of digital currency miners, the profitability of a particular coin will decrease. Therefore, the miners, who started mining one or another coin among the first, can get tangible profits. At the same time, those who are already engaged in the mining of certain tokens should ensure that the production of the cryptocurrency will bring them profit.