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How to mine Bitcoin at home 2023

To start mining Bitcoin at home, one needs to obtain a Bitcoin wallet and a mining rig, install the Bitcoin mining software, and join a mining pool.

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How to mine Bitcoin: A beginner’s guide to mine BTC
How to mine Bitcoin: A beginner’s guide to mine BTC
What is Bitcoin mining? Bitcoin mining explained
Bitcoin mining is the process of creating valid blocks that add transaction records to Bitcoin’s (BTC) public ledger, which is called a blockchain. It is a crucial component of the Bitcoin network as it solves the so-called “double-spend problem.”

The double-spend problem refers to the issue of needing to find consensus on a history of transactions. Ownership of Bitcoin can be proven mathematically through public-key cryptography. However, cryptography alone cannot guarantee that one particular coin hadn’t previously been sent to someone else. 

To form a shared history of transactions, one needs to have an agreed-upon ordering that is based on, for example, the time of the creation of each transaction. But any external input can be manipulated by whoever provides it, requiring participants to trust that third party.

In this article, we will discuss what is crypto mining, how to mine Bitcoin, how Bitcoin mining works, the cost of mining Bitcoin, is Bitcoin mining illegal, and the various Bitcoin mining problems that miners face.

How does Bitcoin mining work?
Mining (blockchain mining, in general) leverages economic incentives to provide a reliable and trustless way of ordering data. The third parties ordering transactions are decentralized, and they receive monetary rewards for correct behavior. On the contrary, any misbehavior results in a loss of economic resources, at least as long as the majority remains honest.

In the case of Bitcoin mining, this result is achieved by creating a succession of blocks that can be mathematically proven to have been stacked in the correct order with a certain commitment of resources. The process hinges on the mathematical properties of a cryptographic hash — a way to encode data in a standardized manner. 

Hashes are a one-way encryption tool, meaning that decrypting them to their input data is nearly impossible, unless every possible combination is tested until the result matches the given hash. So, how is Bitcoin mined?

This is what Bitcoin miners do: They cycle through trillions of hashes every second until they find one that satisfies a condition called “difficulty.” Both the difficulty and the hash are very large numbers expressed in bits, so the condition simply requires the hash to be lower than the difficulty. 

Difficulty readjusts every 2016 Bitcoin block — or approximately two weeks — to maintain a constant block time, which refers to how long it takes to find each new block while mining.

The hash generated by miners is used as an identifier for any particular block and is composed of the data found in the block header. The most important components of the hash are the Merkle root — another aggregated hash that encapsulates the signatures of all transactions in that block — and the previous block’s unique hash.

This means that altering even the tiniest component of a block would noticeably change its expected hash — and that of every following block, too. Nodes would instantly reject this incorrect version of the blockchain, protecting the network from tampering.

Through the difficulty requirement, the system guarantees that Bitcoin miners put in real work — the time and electricity spent in hashing through the possible combinations. This is why Bitcoin’s consensus protocol is called “proof-of-work,” to distinguish it from other types of block-creation mechanisms. To attack the network, malicious entities have no method other than recreating the entirety of its mining power. For Bitcoin, that would cost billions of dollars.

But, how long does it take to mine 1 Bitcoin. One BTC typically takes around 10 minutes to create, although this is only true for strong processors. The Bitcoin mining hardware you use will determine how quickly you can mine. 

Why mine Bitcoin?
In many aspects, Bitcoin mining is comparable to mining for gold. Crypto mining (in Bitcoin's case) is a computer operation that creates new Bitcoin and tracks transactions and ownership of the cryptocurrency. Bitcoin and gold mining are both energy-intensive and can produce significant financial rewards.

Therefore, you can mine BTC to earn profit/rewards. Some BTC miners build Bitcoin mining pools by combining their efforts with other miners. Groups of miners who work together have a more significant chance of earning rewards and splitting the profits. In addition, members of a mining pool pay a fee to be a part of the pool.

If your focus is not on money, you might want to mine Bitcoin if you enjoy playing with computers and learning about this new technology. For example, while doing Bitcoin mining configuration, you can learn how your computer and blockchain-based networks work.

Is Bitcoin mining worth it?
To find an answer to the above question, please conduct a cost-benefit analysis (using web-based calculators) to see whether Bitcoin mining is worth your effort. A cost-benefit analysis is a systematic method that organizations use to determine which actions should be undertaken and which should be avoided.

First, determine whether you are willing to invest the required initial capital in hardware and determine the future value of Bitcoin and the level of difficulty before committing your resources. It's also crucial to examine the amount of difficulty specific to the cryptocurrency you wish to mine to see if the mining operation would be even lucrative.

When both Bitcoin prices and mining difficulty fall, it usually means fewer miners are mining BTC and that acquiring BTC is easier. Nonetheless, expect more miners to compete for fewer BTC as Bitcoin prices and mining difficulty climb.

Is Bitcoin mining legal?
If you're wondering whether Bitcoin mining is legal — the answer is yes, considering the acceptance by various jurisdictions. For example, Enigma (based in Iceland) opened one of the world's most extensive Bitcoin mining operations. 

Crypto mining is considered a business in Israel and is subject to the corporate income tax. On the other hand, crypto miners are considered money transmitters by the Financial Crimes Enforcement Network (FinCEN) in the United States, meaning they may be subject to the rules that govern that conduct. 

In addition, near the base of the Conchagua volcano, a new "Bitcoin city" will be built in the shape of a coin, as announced by El Salvador's President Nayib Bukele in November 2021. Bitcoin mining will be powered by geothermal energy throughout the city. El Salvador will raise a billion-dollar "Bitcoin bond" with the help of crypto infrastructure provider Blockstream to commence construction of the city.

However, in Algeria, Nepal, Russia, Bolivia, Egypt, Morocco, Ecuador, and Pakistan, Bitcoin mining is prohibited. You should always check local rules where you live to find out if Bitcoin mining is legal in your jurisdiction.

How are Bitcoin miners paid?
The network recognizes the work conducted by Bitcoin miners in the form of providing rewards for generating new blocks. There are two types of rewards: new Bitcoin created with each block, and fees paid by users to transact on the network. But, how much does a Miner earn?

The block reward of newly minted Bitcoin, amounting to 6.25 BTC as of May 2020, is the majority of the miners’ revenue. This value is programmed to halve at fixed intervals of approximately four years so that eventually, no more Bitcoin is mined and only transaction fees will guarantee the security of the network. 

By 2040, the block reward will have decreased to less than 0.2 BTC and only 80,000 Bitcoin out of 21 million will be left up for grabs. Only after 2140 will mining effectively end as the final BTC is slowly mined.

Bitcoin future supply schedule

Even though the block reward decreases over time, past halvings have been amply compensated by increases in the Bitcoin price. While this is no guarantee of future results, Bitcoin miners enjoy a relative degree of certainty about their prospects. The community is very supportive of the current mining arrangement and has no plans to phase it out like Ethereum, another major mineable coin. With the right conditions, individual Bitcoin miners can be confident that the venture will turn a profit. 

Although mining is a competitive business, starting is still relatively easy. In the early years of Bitcoin, hobbyists could simply boot up some software on their computer and get started right away. Those days are long gone, but setting up a dedicated Bitcoin miner is not as hard as it may seem at first.

How to choose hardware for Bitcoin mining?
If you are curious how you would go about mining Bitcoin, the first thing to note is that for mining BTC, your only option is to buy a Bitcoin mining machine, i.e., an Application-Specific Integrated Circuit device, commonly referred to as an ASIC.

These devices can only mine Bitcoin, but they are highly efficient in doing so. They are so efficient that their introduction around 2013 made all other types of calculating mining devices obsolete almost overnight.

If you are looking to mine with common CPUs, GPUs or more advanced FPGAs, you will need to look into other coins. Although these devices can mine Bitcoin, they do so at such a slow pace that it’s just a waste of time and electricity. 

For reference, the best graphics card available just before the rise of ASICs, the AMD 7970, produced 800 million hashes per second. Now, an average ASIC produces 100 trillion hashes per second — a 125,000-fold difference. 

The number of hashes produced in a second is commonly referred to as the “hash rate” and it is an important performance measurement for mining devices.

Two other factors should be considered when purchasing a Bitcoin mining device. One is the electricity consumption, measured in watts. Between two devices that produce the same number of hashes, the one that uses the least electricity will be more profitable.

The third measure is the unit cost for each device. It is pointless to have the most energy-efficient ASIC in the world if it takes 10 years to pay itself back through mining.

Bitcoin has a fairly vibrant ecosystem of ASIC manufacturers, which often differ on these three parameters. Some may produce more efficient but also more expensive ASICs, while others make lower-performing hardware that comes at a cheaper price. Before analyzing which device is best suited for your needs, it is important to understand the other factors influencing profits from Bitcoin mining.

The economics of mining Bitcoin
Like the real estate business, Bitcoin mining is all about location, location, location. Different places in the world will have a different average price of electricity. Residential electricity in many developed countries is often far too expensive for mining to be financially viable. 

With the price of electricity often ranging between $0.15 and $0.25 per kilowatt-hour, Bitcoin mining in residential areas runs too high a bill to remain consistently profitable.

Professional Bitcoin miners will often place their operations in regions where electricity is very cheap. Some of these include the Sichuan region in China, Iceland, the Irkutsk region in Russia, as well as some areas in the United States and Canada. These regions will usually have some form of cheap local electricity generation such as hydroelectric dams. 

The prices enjoyed by these Bitcoin miners will often be below $0.06 per KWh, which is usually low enough to turn a profit even during market downturns. In general, prices below $0.10 are recommended to maintain a resilient operation. Finding the right location for mining is largely dictated by one’s circumstances. People living in developing countries may not need to go further than their own home, while those in developed countries are likely to have higher barriers to entry.

Is Bitcoin mining profitable?
Aside from the choice of hardware, an individual miner’s profit and revenue depend strongly on market conditions and the presence of other miners. During bull markets, the price of Bitcoin may skyrocket higher, which results in the BTC they mine being worth more on a dollar basis.

However, positive inflows from bull markets are counterbalanced by other Bitcoin miners seeing the increased profits and purchasing more devices to tap into the revenue stream. The result is that each miner now generates less BTC than before.

Eventually, the revenue generated trends toward an equilibrium point where less efficient miners begin to earn less than they spend on electricity, thus shutting devices off and allowing others to earn more Bitcoin.

Usually, this does not happen instantaneously. There is a certain lag, as ASICs can sometimes not be produced quickly enough to make up for the increase in Bitcoin price.

In a bear market, the opposite principle holds: Revenue is depressed until miners begin to turn off their devices en masse. To avoid being outcompeted, existing Bitcoin miners must find a winning combination of location and hardware that would allow them to maintain their edge. They must also constantly maintain and reinvest their capital, as more efficient hardware can throttle older miners’ profits completely.

Comparison of mining hardware profitability
There are several calculators online on websites such as AsicMinerValue, CryptoCompare and Nicehash, where the profitability of a mining device can be quickly checked. It’s also possible to estimate profit manually with the following formula:

Daily review formula

This is the formula that many of these calculators use, and it simply represents your share of the overall hash rate divided by the network’s total issuance in dollars. The input values required are either fixed parameters (the block time for Bitcoin is 10 minutes, so there are six blocks mined in an hour and 144 in a day), or they can be found on data websites like Blockchain.com or Coinmetrics.

To find the profit, one also needs to subtract the cost of electricity. Thanks to the equivalence between kilowatts and kilowatt hours, this can be as simple as multiplying the device’s power usage by 24 hours in a day and the electricity price per kilowatt hour.

Below is a table illustrating major ASICs currently on the market and their payback period — that is, how long it would take for the investment to break even on current revenues. It’s worth noting that a Bitcoin miner’s profit fluctuates wildly over time, and extrapolating a single day into the future can lead to inaccurate results. Nonetheless, it’s a useful metric to understand the relative effectiveness of each device.

ASIC profitability comparison

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Bitcoin mining 


 Is the process of adding transactions to the Bitcoin blockchain, a decentralized public ledger of all Bitcoin transactions. Miners use powerful computers to solve complex mathematical puzzles, known as proof-of-work (PoW), to validate transactions and add them to the blockchain. In return, miners receive newly minted BTC as a reward for their work.

The process of mining Bitcoin involves solving a complex mathematical puzzle, known as a hash, using specialized software and hardware. The miner that solves the puzzle first is rewarded with new BTC, as well as the transaction fees associated with the transactions included in the block.

Mining Bitcoin requires a significant amount of computational power and energy, as the difficulty of the puzzles has soared over time. As the number of miners on the network increases, the difficulty of solving the puzzles also rises, making it more challenging and less profitable for individual miners to participate in the network.

As the mining difficulty climbs, more advanced equipment, such as application-specific integrated circuits (ASICs), and energy-efficient equipment, such as specialized graphics processing units (GPUs), are being used by miners. Overall, Bitcoin mining is a competitive process and only profitable when the price of BTC is high enough to cover the costs of equipment and electricity and leave a profit.

Related: What are the different ways to mine cryptocurrency?

This article will discuss a Bitcoin mining setup for beginners, how to get started with Bitcoin mining at home, the cost of Bitcoin mining, and its future.

What do you need to mine Bitcoin at home?

Bitcoin mining at home may not be as profitable as it used to be, as the difficulty of mining has increased significantly. One needs to have access to cheap electricity, a reliable internet connection, and a powerful mining rig to mine Bitcoin from home.

Steps to mine Bitcoin at home

The first step to mining Bitcoin at home is to build or purchase a mining rig. A mining rig is a computer specifically designed for mining cryptocurrencies. It will typically consist of multiple GPUs that are capable of performing complex mathematical calculations at high speeds.

Next, one needs to set up a Bitcoin wallet to store the BTC after mining. There are several options available, including software wallets, hardware wallets and paper wallets. Once a user has their mining rig set up and their wallet ready, they will need to download Bitcoin mining software. There are several options available, including BFGMiner, CGMiner and EasyMiner.

Related: What are hierarchical deterministic (HD) crypto wallets?

After installing the mining software, users will need to join a mining pool. A mining pool is a group of miners who combine their computing power in order to increase their chances of finding a block and earning a reward. Slush Pool, Antpool and BTC.com are a few examples of crypto mining pools.

After joining a mining pool, they can start mining Bitcoin. The amount of BTC one can mine will depend on several factors, including the power of their mining rig, the cost of electricity and competition from other miners. So, how hard is Bitcoin mining at home?

Bitcoin mining at home can be challenging, as it requires a significant investment in specialized equipment and a high level of technical expertise. Additionally, the difficulty of mining Bitcoin has increased dramatically in recent years, making it difficult for individuals to compete with large-scale mining operations. Furthermore, the cost of electricity can be very high, making investing in buying Bitcoin a more affordable option.


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How much electricity does it cost to mine Bitcoin?

The cost of electricity to mine Bitcoin can vary greatly depending on several factors, such as the cost of electricity in your area, the efficiency of the mining equipment you are using and the size of your mining operation. On average, it is estimated that the total energy consumption of the Bitcoin network is around 112.5 terawatts-hour per year, which is equivalent to the energy consumption of the entire country of Chile.

However, the cost of electricity can be much higher in some areas. For example, in United States, where the majority of Bitcoin mining takes place, electricity prices can be as low as $12.5 per kilowatt-hour. In contrast, in countries like Germany or Denmark, electricity prices can be as high as $37.5 per kWh, making it much more expensive to mine Bitcoin.

Furthermore, the cost of electricity can also vary depending on the efficiency of the mining equipment. Some devices are more energy-efficient than others, and this can greatly impact the overall cost of electricity. It is important to consider the efficiency of the equipment when calculating the cost of electricity for mining Bitcoin.

What are the various ways to mine Bitcoin at home?

There are several ways to mine Bitcoin at home, but they all involve significant capital investment in specialized equipment and a high level of technical know-how. Some of the most common methods include:

  • Using a computer with a powerful graphics card: This method involves using a computer with a powerful GPU to solve complex mathematical problems in order to validate Bitcoin transactions and earn new BTC.
  • Using an ASIC miner: One can mine BTC, using a specialized mining device called an application-specific integrated circuit miner, which is specifically designed for mining Bitcoin. These devices are much more efficient than a computer with a GPU but also much more expensive.
  • Joining a mining pool: By joining a group of other miners to combine your resources and increase your chances of earning new BTC, one can begin mining Bitcoin at home. However, the mining pool will divide the rewards among the members according to their contributed mining power.
  • Cloud mining: This method involves renting mining power from a cloud mining service, which will take care of the maintenance and management of the mining equipment.

How to mine Bitcoin on a PC

To mine Bitcoin on a PC, one will need to follow these steps:

  • Get a Bitcoin wallet: One will need a place to store the Bitcoin that they mine, so they’ll need to get a Bitcoin wallet. There are several options available, such as a software wallet, which a user can download to their computer, or a hardware wallet, which is a physical device that they can use to store their BTC offline.
  • Download mining software: Users will also need to download mining software that is compatible with their computer’s operating system.
  • Join a mining pool: Joining a mining pool will increase one’s chances of earning new BTC, as the mining pool will divide the rewards among its members according to their contributed mining power.
  • Configure your mining software: One will need to configure their mining software with their Bitcoin wallet address and the address of the mining pool that they joined. They will also need to set the number of threads and the intensity of the mining.
  • Start mining: Once a user has configured their mining software, they can start mining. The software will use a user’s computer’s processing power to solve complex mathematical problems in order to validate Bitcoin transactions and earn new BTC.

How to mine Bitcoin on a smartphone 

Mining Bitcoin on a smartphone is impractical, as smartphones do not have enough processing power to compete with dedicated mining equipment. Additionally, the high energy consumption of mining can cause a smartphone to overheat, which can damage the device.

Also, Bitcoin mobile mining apps are usually not real mining, but rather a way to earn small amounts of BTC or other cryptocurrencies by completing small tasks or watching ads. These apps use a phone’s processing power and battery to run the mining process, but the rewards are very low and may not be worth the resources spent on the process.

If someone still wants to try earning Bitcoin via a mobile mining app, the steps would be as follows:

  • Download a mobile mining app: There are several mobile mining apps available on the App Store or Google Play Store. However, the majority of apps are only accessible on third-party cryptocurrency mining websites, whose reliability must be thoroughly checked before use.
  • Create an account: The next step is to create an account with the mobile mining app in order to start earning Bitcoin.
  • Complete tasks or watch ads: The app will give a user the option to complete small tasks or watch ads in exchange for a small amount of Bitcoin or other cryptocurrencies.
  • Wait for rewards: The rewards will be added to a user’s account balance, and they can withdraw them to their Bitcoin wallet when they reach the minimum threshold.

The future of Bitcoin mining

The future of Bitcoin mining is uncertain and depends on a variety of factors. One major factor is the price of Bitcoin, as the profitability of mining can vary greatly depending on the value of the cryptocurrency. Another critical aspect is the development of mining technology, as new equipment and methods can make mining more efficient and cost-effective. 

Furthermore, the increasing decentralization of the mining network, with larger mining pools controlling a greater share of the network’s hashing power, could also have an impact on the future of mining.

Similarly, it is essential to consider the energy consumption of Bitcoin mining. As the difficulty of mining increases, more energy is needed to solve the complex mathematical puzzles required to mine new BTC. This has led to concerns about the environmental impact of mining, and some experts predict that regulations or taxes aimed at reducing energy consumption could be implemented in the future.

Another important point is the increasing Bitcoin mining competition, which might lead to a situation where only big companies will be able to mine profitably, and small miners will not be able to compete. Overall, the future of Bitcoin mining is uncertain, but it’s likely that the industry will continue to evolve and change as technology and market conditions change.


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