Satoshi Nakamoto Explains Why You Can't Cheat, Beat Or Break Bitcoin Mining

On this day 12 years ago, Bitcoin’s BTC/USD pseudonymous creator Satoshi Nakamoto explained a “common point of confusion” in the process of Bitcoin mining.

What Happened: In a tweet on July 14, popular Twitter account Documenting Bitcoin shared a screenshot of an important clarification about Bitcoin mining made by Satoshi on the same day in 2010.

Satoshi #bitcoin engineering fact 

Mining is not "solving math problems". It is guessing an immensely large number. You can not cheat it, beat it, or break it. The only option you have is to do the work and go through all of the possible guesses, one at a time pic.twitter.com/zTSFeryZdr

— Documenting Bitcoin  (@DocumentingBTC) July 14, 2022

“There's no such thing as being 1% towards solving a block. You don't make progress towards solving it. After working on it for 24 hours, your chances of solving it are equal to what your chances were at the start or at any moment,” stated Satoshi on the Bitcointalk forum.

“It's like trying to flip 37 coins at once and have them all come up heads. Each time you try, your chances of success are the same,” he added.

Why It Matters: The odds of successfully mining a Bitcoin block, as explained by Satoshi, is the reason why mining cryptocurrencies with a proof-of-work consensus mechanism requires such a significant amount of energy.

Analysts at JPMorgan Chase & Co JPM estimated the cost of producing one Bitcoin is down to $13,000 from $24,000 in June. While strategists observed this could be negative for Bitcoin’s price, they found the decline in production cost was almost entirely due to miners switching to more energy-efficient technology.

Cambridge University’s Bitcoin energy consumption index shows that the network consumes 9.52 gigawatts daily, down over 30% from its peak of 15.8 gigawatts in May 2021.

Still, in light of Bitcoin’s decline in 2022, some miners have been forced to sell their crypto holdings to sustain operations.

Bitcoin mining stocks like Marathon Digital Holdings Inc MARA and Riot Blockchain Inc RIOT are down over 75% year-to-date.

BTC Price Action: According to data from Benzinga Pro, at press time, Bitcoin was trading at $20,863.24, up 5.62% over 24 hours.

Photo: FabreGov via Shutterstock