Bitcoin cryptocurrency can not only be bought but also mined. This used to work quite well in a block of flats on an ordinary computer. In recent years, however, such mining has become significantly professionalized and, due to the demanding performance and energy consumption, has ceased to make sense in our conditions. Nevertheless, Czechs are mining bitcoin. And they are not deterred by the fact that the reward for this is gradually decreasing – they go to the desert for this reason.
Prague
19:40 April 26, 2024
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Bitcoin supply should run out in 2140 (illustrative photo) | Photo: Miloslav Hamřík | Source: Czech Radio
The co-founder of 2Bminer, Jakub Hlavenka, shows in a video what cryptocurrency mining looks like in the desert on the Arabian Peninsula. In the background, fans can be heard cooling the mining machines in the shipping container. “It looks like a desktop computer, but it’s hundreds of machines. 300 units consume roughly 1 megawatt.”
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The average household in the Czech Republic consumes roughly 3.5 megawatt hours per year. “In the company, we calculated how much energy our machines consume, and it comes out to be 60 percent of the Škoda plant.”
This is also why bitcoins and other cryptocurrencies are mined outside the Czech Republic. The company has containers in, for example, the United Arab Emirates or Paraguay, where there is access to cheap energy.
“We are using renewable green sources, and the energy there is in excess. This means that we are not taking away from some natives the energy they would need to light the heating,” adds the second of the founders, Michal Bílek.
Math puzzles
At first glance, sophisticated cryptocurrency mining machines do not perform any complex calculations. “They guess a random number and hope they hit the right one. And if they succeed, they get some reward for it. But the system has such a feedback mechanism that at the moment when it is terribly easy to guess the number, the task is more complicated and more capacity needs to be involved,” explains Dominik Stroukal, an economist from the Metropolitan University of Prague.
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Because of this, mining costs in the form of electricity are also rising. “In the beginning, it was enough for a person to connect his personal computer or laptop to the network and he was able to mine 50 bitcoins. Today, it would take a person on a personal computer longer than the time since the beginning of the universe.”
In addition, due to the so-called halving of Bitcoin, the reward for miners is gradually reduced. But this reward is not the only thing that keeps them with the digital currency. Miners also earn from fees for each Bitcoin payment.
“If a lot of miners happened to disconnect from the network at the moment, there would be a strange situation where the complexity of the cipher would decrease. This ensures the system that there will never be a shortage of miners,” explains Martin Stránský, the founder of the BitPlus exchange. The system is thus prepared even if miners lose interest in bitcoins.
But the supply of Bitcoin is not infinite, it should run out in 2140. Therefore, mining will become more and more difficult and fewer and fewer digital coins will gradually enter circulation.
Patrick Salat
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