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Merge pull request #672 from Dan-Nolan/patch-1

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Integer Typo: Ch 10
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Will Binns 2020-04-30 21:08:14 -06:00 committed by GitHub
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@ -875,7 +875,7 @@ Let's look at a specific example. Assume a miner has purchased mining hardware w
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...where 21240 is the number of blocks in four years. The miner has a 98% probability of finding a block over four years, based on the global hash rate at the beginning of the period.
...where 210240 is the number of blocks in four years. The miner has a 98% probability of finding a block over four years, based on the global hash rate at the beginning of the period.
If the miner does find a single block in that timeframe, the payout of 12.5 bitcoin, at approximately $1,000 per bitcoin, will result in a single payout of $12,500, which will produce a net profit of about $7,000. However, the chance of finding a block in a 4-year period depends on the miner's luck. He might find two blocks in 4 years and make a very large profit. Or he might not find a block for 5 years and suffer a bigger financial loss. Even worse, the difficulty of the bitcoin Proof-of-Work algorithm is likely to go up significantly over that period, at the current rate of growth of hashing power, meaning the miner has, at most, one year to break even before the hardware is effectively obsolete and must be replaced by more powerful mining hardware. If this miner participates in a mining pool, instead of waiting for a once-in-four-years $12,500 windfall, he will be able to earn approximately $50 to $60 per week. The regular payouts from a mining pool will help him amortize the cost of hardware and electricity over time without taking an enormous risk. The hardware will still be obsolete in one or two years and the risk is still high, but the revenue is at least regular and reliable over that period. Financially this only makes sense at very low electricity cost (less than 1 cent per kW-hour) and only at very large scale.