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

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Onur
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Onur

Hey!
Is it profitable to mine with a phone?

Steven Hay
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Steven Hay

Hi Onur,

No, phones are too low-powered to be useful for mining. You will just run down the battery without making hardly any money.

Clifton Bradeley
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Clifton Bradeley

Hi Steven and Zsofia,
Great advice BTW. I have a Macbook pro I use. I take it to different places. Would I need a new Mac and leave it in one place to mine? I heard you say you have a Mac. What exact set-up do you have? Has mining been successful for you?

Steven Hay
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Member
Steven Hay
Hey Clifton, Maybe Zsofia has a Mac but I don’t. I have mined in the past, mostly Peercoin and Vertcoin with an old AMD GPU. I’d say that it’s been quite successful, given that Vertcoin’s price has been spiking lately. I probably made back my power costs 100x – 1000x over by now. One thing mining requires is a steady internet connection. I’d guess that by taking your laptop around, you’d lose of mining time when it was out of range of internet connections. Also, you can’t expect much of a return – if any – using a laptop to… Read more »
Bill
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Bill

I’ve been reading and learning about mining and have a basic knowledge, but a few questions. I was hoping to run a mining operation in an out building at my house, by wifi network to my home computer. My understanding is that I can use an ASCIC machine without a computer. Will the heat put out by the machine be adequate since I have no heat in the building ? Are there other issues I haven’t thought of ?

Steven Hay
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Member
Steven Hay
Hi Bill, I’m not sure which ASIC you intend to run but my understanding is that generally these devices plug into a router which connects them to the internet. They need a constant stream of data from the blockchain and to the pool. I’m sure you could get a WiFi router to connect the ASIC through the internet connection in your house. You’ll need a computer on the network to set the miner up on your chosen pool and for monitoring. You’ll probably need it again for troubleshooting and changing things in future. The ASIC will put out a lot… Read more »
Mike
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Mike

Hello, apologies for the basic nature of this question. As I understand it, when mining, i’m basically selling processing power to “solve” algorithms in blocks. Once solved I get paid in bitcoins (or whichever crypto currency I’m processing). My question is, who wants the algorithms solved in the first place. i.e. where does the demand for unsolved algorithms come from and why do they need solving?

Steven Hay
Member
Member
Steven Hay
Hey Mike, No worries. You’ve got the gist of mining there, yes. OK, so there’s no real demand per se for the solutions. It’s not like the solutions have any use outside of mining… But they’re very necessary to the security of the network. You see, Bitcoin uses what’s known as Proof of Work mining. The solutions prove that a miner performed the work of essentially making random guesses at a solution. There’s no other way to find a solution but by making random guesses. As a great deal of work is required to find the “solution” to each block,… Read more »
Wasim
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Wasim

Hi, iam new to this bitcoinword, can somebody educate me should i sit in front of computer all the time for mining or mining machine will do rest for me. Thanks i advance

Steven Hay
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Member
Steven Hay

Hey Wasim,

Once you’ve set up your miner and started it, it will mine automatically without any more user input required. You should check on it from time to time. It should alert you if any errors come up.

enzolow
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enzolow

Hi, guy
is that got any video or any guide for set up a new S9 Antminer ?

Zsofia Elek
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Zsofia Elek

Hi Enzolow, please refer to the video in our Antminer S9 review for the setup: https://99bitcoins.com/antminer-s9-review/

Ippo
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Ippo

Hi guys,

I’m totally new in the game and I have a question.

Is it possible to connect multiple miner hardware devices with one computer?

Thanks in advance…

Steven Hay
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Member
Steven Hay

Hey Ippo,

Yes, I believe this is quite possible.

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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Member
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
Member
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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Member
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
Admin
Member
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/

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