Beginner’s Guide to Mining Bitcoins

Last updated on October 13th, 2017 at 10:56 pm

One of the biggest problems I ran into when I was looking to start mining Bitcoin for investment and profit was most of the sites were written for the advanced user. I am not a professional coder, I have no experience with Ubuntu, Linux and minimal experience with Mac. So, this is for the individual or group that wants to get started the easy way.

1. Get a Bitcoin mining rig

Bitcoin mining is a very competitive niche to get into. As more and more miners come on board with the latest mining hardware the difficulty to mine increases each day. Before even starting out with Bitcoin mining you need to do your due diligence. This means you need to find out if Bitcoin mining is even profitable for you.

The best way to do this is through the use of a Bitcoin mining calculator. Just enter the data of the Bitcoin miner you are planning on buying and see how long it will take you to break even or make a profit. However, I can tell you from the get go that if you don’t have a few hundred dollars to spare you probably won’t be able to mine any Bitcoins.

Once you’ve finished with your calculations it’s time to get your miner. Make sure to go over our different Bitcoin mining hardware reviews to understand which miner is best for you. Today, the Antminer S9 is the newest and most powerful miner.

  • Select miner

  • Released
  • How much electricity does your miner consume?Power consumption
  • Power efficiency
  • How "fast" can your miner mine BitcoinsHash rate
  • Dimensions
  • Weight
  • This does not include hardware cost, electricity cost, or changes in BTC rate and mining difficultyRevenue in vacum*
  • Price
  • Our rating of the miner taking into account all specifications aboveOverall rating
  • Antminer R4

  • Antminer R4
  • August 2016
  • 845W±9%
  • 0.1 J/GH +9%
  • 8.6TH/s±5%
  • 20 x 3.9 x 8.7 inches
  • unknown
  • Based on BTC rate and mining difficulty on August 28th 20160.29 BTC/month
  • Estiamted $1000
  • 88%
  • Read review
  • AntMiner S9

  • antminer s9
  • June 2016
  • 1375W ±7%
  • 0.098 J/GH
  • 12.93 TH/s
  • 13.7 x 5.3 x 6.2 inches
  • 10 lbs
  • Based on BTC rate and mining difficulty on July 1st 20160.5 BTC/month
  • ~$2000
  • 95%
  • Read review
  • Avalon 7

  • Avalon 7
  • November 2016
  • 850W-1000W
  • 0.29 J/GH
  • 6 TH/s
  • 13.4 x 5.3x 5.9
  • 9.5 lbs
  • 0.14 BTC/month
  • $880
  • 81%
  • Read review
  • AntMiner S7

  • Antminer s7
  • August 2015
  • 1293W
  • 0.25 J/GH
  • 4.73 TH/s
  • 11.8 x 6.1 x 4.8 inches
  • 7.5 lbs
  • Based on BTC rate and mining difficulty on July 1st 20160.15 BTC/month
  • $599
  • 83%
  • Read review
  • AntMiner S5

  • antminer s5
  • December 2014
  • 590W
  • 0.51 J/GH
  • 1.155 TH/s
  • 11.7 x 5.3 x 6.1 inches
  • 6.6 lbs
  • Based on BTC rate and mining difficulty on July 1st 20160.05 BTC/month
  • $199
  • 79%
  • Read review
  • Avalon 6

  • Avalon 6
  • August 2015
  • 1100W
  • 0.29 J/GH
  • 3.5 TH/s
  • 13.9 x 5.1 x 5.9 inches
  • 9.5 lbs
  • Based on BTC rate and mining difficulty on July 1st 20160.12 BTC/month
  • $700
  • 76%
  • Read review
  • Antrouter R1

  • Avalon 6
  • September 2015
  • This miner barely takes up any powerNegligible
  • Negligible
  • 5.5 GH/s
  • 3.3 x 2.2 x 1.1 inches
  • 0.2 lbs
  • This miner is a solo miner. It has a small chance of mining a block but does not generate monthly revenue.Probably nothing
  • $39
  • 70%
  • Read review

As a side note it’s important to state that in the past it was possible to mine Bitcoins with your computer or with a graphics card (also known as GPU mining). Today however, the mining niche has become so competitive that you’ll need to use ASIC miners – special computers built strictly for mining Bitcoins.

2. Get a Bitcoin wallet

First thing you need to do is get a “Bitcoin Wallet“. Because Bitcoin is an internet based currency, you need a place to keep your Bitcoins. Once you have a wallet make sure to get your wallet address. It will be a long sequence of letters and numbers. Each wallet has a different way to get the public Bitcoin address but most wallets are pretty straight forward about it. Notice that you’ll need your PUBLIC bitcoin address and not your PRIVATE KEY (which is like a password for your wallet).

If you’re using a self hosted wallet (i.e. you downloaded a program to your computer and are not using an internet based service) there’s one additional very important step. Make sure you have a copy of the wallet.dat file on a thumb drive and print a copy out and keep it in a safe location. You can view a tutorial on how to create a secure wallet here. The reason is that if you computer crashes and you do not have a copy of your wallet.dat file, you will lose all of your Bitcoins. They won’t go to someone else, they will disappear forever. It is like burning cash.

3. Find a mining pool

Now that you have a wallet you are probably roaring to go, but if you actually want to make Bitcoin (money), you probably need to join a mining pool. A mining pool is a group of Bitcoin miners that combines their computing power to make more Bitcoins. The reason you shouldn’t go it alone is that Bitcoins are awarded in blocks, usually 12.5 at a time, and unless you get extremely lucky, you will not be getting any of those coins.

In a pool, you are given smaller and easier algorithms to solve and all of your combined work will make you more likely to solve the bigger algorithm and earn Bitcoins that are spread out throughout the pool based on your contribution. Basically, you will make a more consistent amount of Bitcoins and will be more likely to receive a good return on your investment.

When choosing which mining pool to join you will need to ask several questions:

  • What is the reward method? – Proportional/Pay Per Share/Score Based/PPLNS
  • What fee they charge for mining and withdrawal of funds?
  • How frequently they find a block (means how frequently I get rewarded)?
  • How easy it is to withdraw funds?
  • What kind of stats they provide?
  • How stable is the pool?

To answer most of these questions you can use this excellent post from BitcoinTalk. You can also find a complete comparison of mining pools inside the Bitcoin wiki. For the purpose of demonstration I will use Slush’s Pool when mining for Bitcoins. Once you are signed up with a pool you will get a username and password for that specific pool which we will use later on.

Follow the link to go to their site and click the “Sign up here” link at the top of their site and follow their step by step instructions. After you have your account set up, you will need to add a “Worker”. Basically, for every miner that you have running, you will need to have a worker ID so the pool can keep track of your contributions.

4. Get a mining program for your computer

Now that you’ve got the basics covered we’re almost ready to mine. You will need a mining client to run on your computer to that you will be able to control and monitor your mining rig. Depending on what mining rig you got you will need to find the right software. Many mining pools have their own software like Bitminer but some don’t. You can find a list of Bitcoin mining software here.

I’m using a mac so I will use a program called MacMiner. The most popular program I’ve found for a PC are BFGMiner and 50Miner  . If you want to compare different mining software you can do this here.

5.  Start mining

OK, so hopefully now everything is ready to go. Connect you miner to a power outlet and fire it up. Make sure to connect it also to your computer (usually via USB) and open up your mining software. The first thing you’ll need to do is to enter your mining pool, username and password.

setting up bitcoin mining pool

Once this is configured you’ll basically start mining for Bitcoins. You will actually start collections shares which represent your part of the work in finding the next block. According to the pool you’ve chosen you will be paid for your share of coins – just make sure that you enter your address in the required fields when signing up to the pool. Here’s a full video of me mining in action:

Conclusion – perhaps it’s better just to buy the coins?

To conclude this article here’s something to consider. Perhaps it would be more profitable for you to just buy Bitcoins with the money you plan to spend on Bitcoin mining. Many times just buying the coins will yield a higher ROI (return on investment) than mining. If you want to dig into this a bit deeper here’s a post about exactly that.

Happy mining!!

StartBitcoin

Established on June 2011 StartBitcoin is one the earliest guides for Bitcoin mining on the web. It was purchased by 99Bitcoin in late 2015.

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521 Comments on "Beginner’s Guide to Mining Bitcoins"

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Mary Ann Faust
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Mary Ann Faust

How much money to start in investing on Crypto Mining

Steven Hay
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Steven Hay

Hey Mary Ann,

Any amount! While a whole bitcoin currently costs over $7000, you can buy fractional amounts too. Bitcoin is divisible down to a unit of 0.00000001, which is called a satoshi. In practice, you’d probably want to invest at least $50 so it feels meaningful, but it’s fine and even recommended to experiment with smaller amounts while you’re learning.

Dooray
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Dooray

Just watched the beginners guide to mining. In the video I see the mining software works on multiple crypto-currencies. Is there a way to shop for mining hardware and software by the multiple currencies it can mine? Furthermore, is it worthwhile to do so? Or does it divide the resources(hardware, software) by too much?

This is a very good site for beginners.
Thanks

Steven Hay
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Member
Steven Hay
Hi Dooray, Glad the site is helping you out, that’s what we’re here for. The most flexible hardware for mining is a good graphics card (GPU). AMD GPUs have historically been the most efficient for mining. GPUs are able to mine any existing Proof of Work coin; Bitcoin included. However, the catch is that any existing PoW coin with an algorithm for which an ASIC (Application Specific Integrated Circuit) has been produced, will almost certainly be unprofitable to mine via GPU. ASICs are *much* more efficient than GPUs for mining, so they soon take over and dominate the hashpower on… Read more »
simplyreg
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simplyreg

Hi I found a site called bitzfree, is that a legit one? Mining with them is fairly easy and simple. I would like to find sites like them… can you help me? Thanks!

Zsofia Elek
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Zsofia Elek

Hi Reggie, this site seems to be offer cloud mining, that we do not recommend as most of the time they turn out to be scams or they are not profitable at all. You can read more about this topic in this article: https://99bitcoins.com/cloud-mining-profitable-just-evolution-scam/

bert
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bert

Hi ,
I have been mining ethereum using your guide (thank you !) it has been a couple of days but I have seen no deposit in my etherwallet. When can I expect to see the rewards of my mining?

Steven Hay
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Member
Steven Hay
Hey Bert, I’d need some more details to give you a clear answer here. What I’m assuming is that you’re using your computer at home or work to mine Ethereum on a pool. The payout duration to your wallet will depend on two things: 1) the speed of your computer’s graphics card and 2) the payout settings of the pool. Pools usually have a minimum payout threshold, which you should be able to check or change after logging into the pool and accessing your settings. Some pools allow or require you to request a manual withdrawal. Whatever your pool’s payout… Read more »
crownmixbj
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crownmixbj

helloo,, everyone here,, pls am new in here and i really want to know how to use miner machine,, could anyone kindly give me a tutorial to go for , thnks

Zsofia Elek
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Zsofia Elek

Hi, this post gives a basic idea about how to start mining, after reading through if you have specific questions, please let us know and we will answer.

Carol
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Carol

Hi, please explain exactly what one’s computer is looking for when ‘mining’? What is being searched through and to find what?

Zsofia Elek
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Zsofia Elek

Hi Carol, when mining cryptocurrency, a dedicated program is running in the background, you can see some of the mining software in this article: https://99bitcoins.com/the-6-best-bitcoin-mining-software/

Carol
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Carol

Many thanks but my question stands. What is being searched through and what does one find? When the ‘thing’ is found what does one do with it?

Carol\'s daddy
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Carol\'s daddy

back to the kitchen.. mining isnt for girls

Siraj El
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Siraj El

does my laptop always have to be connected to my mining rig

Abdulrahman
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Abdulrahman

Yes.Miner handshake with netwok and pool computers

Steven Hay
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Member
Steven Hay

Hey Siraj,
Nope, not if you have a modern mining device with an onboard controller (eg. an Antminer S7 or S9). Just connect the miner to a router so it has both internet and network access. Then configure the miner from your laptop over the network, entering its details into your mining pool of choice. Thereafter, you can remove your laptop from the network.

MIke
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MIke

How many nonce values are there in each new block to be tested? Are there more than 1 billion?

Steven Hay
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Steven Hay

Hi Mike,
Yes, there are over a billion possible nonce values; nearly 4.3 billion in fact. The nonce is a 32-bit field so it has an upper value limit of 4,294,967,295. If a miner exhausts all possible nonces without finding a solution – which happens regularly – the miner requests an update from the server and then begins all over again.

MIke
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MIke

Thanks Steven. I read a little more about the hashing algorithm, I was wondering what the distribution of block modifications from the server is for winners? I mean, how many times is the block changed by the server (then all possible nonce values run through) before a low enough hash value is found? Do you know if anyone keeps numbers on this? I’m thinking it might not look exactly random, based on how the hash works.

Steven Hay
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Member
Steven Hay
Hey Mike, That would depend on two things: the speed of the miner and the current Difficulty value. Difficulty adjusts to total network hashrate about every two weeks, so as to maintain a block interval target of 10 minutes. The higher Difficulty goes, the more hashes a miner has to attempt before finding a solution, generally speaking. Of course, the higher a miner’s hashrate, the more attempts it can make per second. Bitmain’s S9 has a hashrate of ~12 Terahash / second, meaning it makes 12 trillion hash attempts per second. By referring to total network hashrate and block intervals,… Read more »
MIke
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MIke

Thanks very much Steven.

GIChuck
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GIChuck

Good eye Mike noticing it does not look random. In Reality there is no such thing as “random”. Liken to no such thing as “cold” (lack of heat). “Random” (lack of interpreting causality)

prabhu1955
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prabhu1955

What is bitcoin account number and how does it will be created

Zsofia Elek
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Zsofia Elek

Hi Prabhu, Bitcoin address is created when you open an account in a wallet. Here you can read more about how wallets work: https://99bitcoins.com/what-is-bitcoin-wallet-bwbt-3/

KS
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KS

Hi all, is the amount of bitcoins in circulation I.e in actual commercial use, always increasing? Who controls this amount in circulation to be increased in relation to the need. In traditional currencies, the country’s central bank does that. In Bitcoin world, who?.

Zsofia Elek
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Zsofia Elek

Hi KS, Bitcoin is a decentralized cryptocurrency with no authority supervising the amount of coins in circulation. The total amount of Bitcoins is limited to 21 millions, that is reached gradually through the mining activity. You can read more about Bitcoin mining here: https://99bitcoins.com/bitcoin-mining-profitable-beginners-explanation/ and here you can read more about how the finite supply of Bitcoin is reached: https://99bitcoins.com/bitcoins-2016-halving-what-is-it-and-why-should-you-care/

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