Bitcoin mining rewards are reduced by about half every four years. When Bitcoin was first mined in 2009, 50 BTC will be obtained by mining a block. In 2012, this number was halved to 25 BTC. By 2016, this number was again halved to 12.5 BTC. On May 11, 2020, the reward was halved again to 6.25 BTC.
What is needed to mine Bitcoin?
Although in the early days of Bitcoin history, individuals may have been able to use ordinary home personal computers to compete for blocks, this is no longer the case. The reason is that the difficulty of Bitcoin mining changes over time.
In order to ensure the smooth operation of the blockchain and its ability to process and verify transactions, the goal of the Bitcoin network is to generate a block every 10 minutes or so. However, if there are 1 million mining machines competing to solve the hash problem, they may find a solution faster than if ten mining machines solve the same problem. For this reason, Bitcoin aims to evaluate and adjust the mining difficulty every 2,016 blocks or approximately every two weeks.
When there is more computing power to mine Bitcoin together, the difficulty of mining will increase to maintain a stable rate of block production. Less computing power means a lower level of difficulty. At today’s network scale, personal computers will almost certainly find nothing to mine Bitcoin.
All of this is to say that for competitive mining, miners must now invest in powerful computer equipment, such as GPU (graphics processing unit), or more realistically, application-specific integrated circuit (ASIC). These can range from $500 to tens of thousands of dollars. Some miners—especially Ethereum miners—buy individual graphics cards (GPUs) as a low-cost way to piece together mining operations.
If B and C answer at the same time, then the analogy fails.
In Bitcoin terminology, simultaneous answers often appear, but in the end, there can only be one winning answer. When multiple answers that are equal to or less than the target number appear at the same time, the Bitcoin network will use a simple majority (51%) to decide which miner to respect.
Usually, the miner does the most work, or in other words, the miner who validates the most transactions. The missing block then becomes the “orphan block.” Orphan blocks are those blocks that have not been added to the blockchain. The miner who successfully solves the hash problem but does not verify most transactions will not receive Bitcoin rewards.