Ten Key Numbers for Bitcoin Miners:
“God built the universe on numbers.”
— Pythagoras
God (according to Pythagoras) built the Universe on numbers and so did Satoshi. The certainty of the business of Bitcoin Mining is one of the most attractive things about the movement.
Pythagoras believed reality is mathematical in nature. He believed there was a system of principles existing behind numbers. One of his ideas revolves around the symbolism and beauty associated with the Divine Proportion, or Golden Ratio. This number (approximately 1.618) has been studied and utilized ever since Pythagoras by Euclid, Leonardo Da Vinci, Fibonacci, Quantum Physicists, Dan Brown (The Da Vinci code), and others.
It's refreshing that Satoshi tracked Pythagoras; he designed a monetary system based on numbers. Bitcoin is not a system based on opinions, violent enforcement, nation-states, or pieces of paper.
In contrast with a system based on numbers, we have fiat. It’s a system based on full faith and credit of the country that issued the currency and that system is doomed. As others have said, it’s a system that can only exist till voters realize they can vote themselves gifts (student loan forgiveness anyone?) from the public treasury. Completely insane ideas such as Modern Monetary Theory which Alexandria Ocasio-Cortez says “should be a larger part of the conversation” are only possible in a fiat world.
“If a thing can’t go on forever it will eventually stop”, said economist Herbert Stein. To help prepare everyone for the end of the Fiat Standard and the beginning of the Bitcoin standard, I present the Top 10 Bitcoin Mining Numbers (ordered small to large):
1. .55%: The percent of global electricity that Bitcoin mining uses
2. 1: Blocks are data structures within the blockchain database, where transaction data in a cryptocurrency blockchain are permanently recorded. A block records some or all of the most recent transactions not yet validated by the network. Once the data are validated, the block is closed.
3. 256: As in Sha256, 256-bit encryption refers to the length of the encryption key used to encrypt a data stream or file. A hacker or cracker will require 2^256 different combinations to break a 256-bit encrypted message, which is virtually impossible to be broken by even the fastest computers.
4. 2009: This is the year that Bitcoin was created.
5. 2,016: The exact time required to produce a new block can vary significantly and depends in part on the current mining difficulty level, which adjusts every 2,016 blocks, or approximately once every two weeks.
6. 2140: The year that the limit of 21 million bitcoins will be reached, after this there will be no Bitcoin left to mine.
7. 210,000: After every 210,000 blocks mined, or roughly every four years, the block reward given to Bitcoin miners for processing transactions is cut in half. This event is referred to as halving because it cuts in half the rate at which new bitcoins are released into circulation.
8. 21,000,000: A number that needs no introduction, the hardest of the hard money, the Alpha and the Omega, the beginning and the end. This is Bitcoin’s equivalent to the Golden Ratio. It’s the total number of Bitcoins that will ever be.
9. 100,000,000: While precision isn’t possible, the number of people who own Bitcoin is over 100 million.
10. 377,940,000,000: This is the total Market Capitalization (as of September 15th, 2022) of Bitcoin and represents the wealth created by Satoshi since its inception.
Bitcoin Mining is the first business plan not based on guesses of what the consumer will choose to buy. There are many assumptions that you need to make in your business model; future hash rate, future Bitcoin price, but the vagaries of market demand are not present. Almost all the numbers that you need to estimate the profitability of your Bitcoin mining business is included above. It’s elegant in its precision.
Another aspect of the Bitcoin network is the certainty of its numbers. Every 10 minutes the books are closed, once a Bitcoin is sent, it’s permanent. There can be no regulatory capture, no “chargebacks”, and no cancellation (especially in the current sense of cancel culture).