[Zhikuang University Q&A] How to calculate the theoretical output of Bitcoin mining?

Answer from Zhikuang University editor @OWEN:

Before calculating the theoretical output of each T computing power per day, we must first understand the following concepts:

• Difficulty: refers to the difficulty of mining, the difficulty of finding a hash value that meets the system requirements.

• Hashrate: The number of times a mining machine completes hash calculations per unit time.

• Block Reward: The system rewards miners with Bitcoins for mining a new block. Currently, it is 12.5 Bitcoins.

The initial difficulty of the Bitcoin network is defined as 1, that is, Difficulty=1. It means that when the Bitcoin network first starts running, one block can theoretically be mined for every 2^48/(2^16-1)≈2^32 Hash calculations.

As mining power increases, the difficulty of Bitcoin mining continues to increase. When the mining difficulty is D, theoretically, it takes D*2^32 hash operations to mine a new block.

The miner's computing power is H (in hash/s), his daily (24-hour) coin output is P, the mining difficulty is D, and the system reward is R, then:

We assume that the miner's computing power is 1TH/s (i.e. 10^12H/s), and the difficulty D can be queried through relevant websites. The current difficulty D=15958652328578, the system reward R=12.5 bitcoins, and the daily income of 1T computing power is calculated to be P=0.0001576 bitcoins.

▲Data source: https://btc.com/stats/diff

The theoretical output of each terabyte of Bitcoin computing power can be found on the website. The revenue per terabyte of computing power under the PPS settlement method in the figure below is the theoretical output per terabyte of computing power.

▲Data source: https://btc.com

In addition to the system reward, there is also a mining fee for packaging transactions when mining a new block. How should this part of the output be calculated? This is related to the settlement method of the mining pool. This is also another question from a user. We will discuss this in the next "Zhi Kuang University Q&A" article. Stay tuned.