How much did Satoshi Nakamoto spend to mine Bitcoin for the first time?

Mining is the most basic, most difficult to understand, but also the most interesting thing in Bitcoin.

Some friends often ask a question when they read our articles: What is mining? How can Bitcoin be transferred to my account after mining? Does mining require a shovel like real miners? Where can I go to mine? There are many interesting and ridiculous questions. I can't help laughing. Today, let's talk briefly about what mining is and what happened during the first mining.

First of all, let's clarify the name of Bitcoin. Mining is completely different from mining coal and gold. It is not just taking a shovel and going down the mine to mine. The creation of Bitcoin is quite special. Some friends have asked before, how did Bitcoin come about? Did it come out of thin air or was it issued by a company like Q coins?

In fact, neither is true. The underlying technology of Bitcoin is called blockchain technology. Except for the first block which was mined by Satoshi Nakamoto himself, the subsequent blocks require a very complicated arithmetic problem. If a human is asked to do this arithmetic problem, it will probably take thousands of years to solve it. This requires the assistance of a powerful computer. If a computer is used for calculation, it only takes about 8-10 minutes to solve the problem. After the problem is solved, the next block can be produced, and because you have produced a new block, you can get a certain reward. This process is called "mining."

The action of “mining” is the process of generating new blocks. It does not mean that all public blockchains require mining. It is just because of the POW mechanism designed by Bitcoin, that is, the proof of work mechanism, the workload proof mechanism, that allows those who work the fastest and best to receive Bitcoin rewards.

The first person to mine Bitcoin after its creation was naturally Satoshi Nakamoto, the father of Bitcoin. Due to the characteristics of blockchain technology, all Bitcoin transactions can be seen and traced, and this transaction is forever remembered by the blockchain network and engraved in the history of Bitcoin. The following figure shows the content of the first mined block.

Several key information can be seen, time: 2009-04-2 02:15:05, this is the time when Bitcoin was actually born. The 50.00000000 in the lower right corner is the number of Bitcoins produced by mining. And this number will be halved every four years, that is, after four years, the mining output will be 25, and after another four years, it will be 12.5, and so on. And Bitcoin will rise in price with each halving.

In fact, many people have already written about Satoshi Nakamoto's mining. To put it simply, Satoshi Nakamoto mined the first block on a small server in Helsinki, Finland, Northern Europe. The first 50 bitcoins were produced. The address that received 50 bitcoins is called the Genesis of Bitcoin. The owner of this address is Satoshi Nakamoto himself. The easiest way to verify who is Satoshi Nakamoto is to see who can withdraw the bitcoins from the Genesis blockchain. The following figure is a screenshot of the Genesis blockchain.

Many people will have a question after seeing this information. Isn't it said that 50 bitcoins were mined? Why did it increase to 66 or so? That's because this address is exactly the address of Satoshi Nakamoto, the father of Bitcoin, so many people may send some bitcoins to his address for gratitude, commemoration, or a sense of ritual. Over time, there are many more bitcoins in it.

The difficulty of mining now is much greater than when Satoshi Nakamoto was mining. Mining has evolved from CPU to GPU and finally to professional mining machines. In the second half of 2018, the sharp drop in Bitcoin caused many mining farms to be unable to make ends meet and their profits were extremely low. You should know that at that time, even with the sharp drop in Bitcoin, it was still around 6,000 US dollars. Even so, many small mining farms were closed due to cost issues. You can imagine how exaggerated the cost of mining Bitcoin was at that time.

When Satoshi Nakamoto mined Bitcoin on that Nordic server, he probably didn't spend much money at all. The cost of renting a server and using his own computer was about the same. Maybe with the price of his hamburgers and Coke, the total cost of mining for the first time was only a few hundred dollars. But he dug up a treasure worth more than $1 million. But in fact, the Bitcoin he invented is far more than the financial value that we see now. The blockchain technology it brought is the great invention that truly changed the future of mankind.