Bitcoin has no centralized management authority. Anyone can participate in the Bitcoin network and mine Bitcoin by competing for the right to record transactions, with all participants enjoying equal status. Many people believe that they can mine Bitcoin using a home computer. In fact, in the early days, home computers could mine Bitcoin. However, as mining competition has intensified, the low computing power of ordinary computers can no longer mine Bitcoin today. Currently, Bitcoin mining is dominated by professional mining machines and mining farms.

Advantages of Mining Bitcoin:

① Low cost. Apart from the cost of mining machines, electricity, and operational expenses, there are basically no other expensive expenditures. In a bull market, it is a low-cost, high-reward, and relatively stable way to obtain Bitcoin.

② Lower risk. As mentioned above, the costs of Bitcoin mining mainly include mining machines, electricity, and operational expenses, and these costs have relatively limited fluctuations. Therefore, compared to investors in the secondary market, mining Bitcoin can avoid the risk of significant price volatility.

③ Clear profit model. Mining has a payback period. With the same investment cost, mining often allows one to hold more Bitcoin. For some traditional investors, this is more trustworthy than speculative profits.

Challenges of Mining Bitcoin:

① Technical requirements. The computing power of a single mining machine is limited, making it very difficult to mine Bitcoin. It is necessary to connect mining machines to a mining pool or combine multiple machines into a mining farm for joint mining, which requires certain technical support.

② Location and electricity costs. Large-scale mining farms require setting up sites and obtaining approvals. Privately built mining farms carry legal risks, and ordinary users who host their mining machines in farms also face various risks. Mining machines consume enormous amounts of electricity, and operating them in areas with high electricity costs increases expenses. Sometimes, if the price of Bitcoin drops significantly, it may lead to a situation where costs exceed revenue.

③ Mining machine maintenance. The operation and maintenance of mining machines in a farm require manpower, resources, and technical expertise. Additionally, if a mining machine encounters serious hardware issues, it can affect mining profitability.