Beginner’s Guide to Mining Bitcoins

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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.

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!!

Find the best exchange to buy Bitcoins


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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465 Comments

  1. Hi. I have a small company, with a lot of computers that need to be on 24 hours per day, so, electricity cost is not the issue; What do you think of setting up about 10 computers for mining, in this case? The have I5 to I7 cpus, some have Intel Graphics, other Nvidia’s and others Radeon’s.
    Also, is it possible to have 2 different types of mining in 1 computer, one mining through the GPU and other, the CPU?
    I’m new at this, never tried it, but just thinking all these computers are going to waste all this time without work (but that need the availability)…
    Please so share your thoughts and advices. Thanks.

  2. Hey great tutorial,

    I basically have a gaming rig and am curious about bit mining so I wanted to do a bit of mining just for the experience, nothing else.

    Is it fair to say that if I was serious that I would need an ASIC or at least an ATI card to earn any profit no matter how small?

    Currently I have a geforce 670, does SLI come into this at all?

    Thanks for your time.

  3. Thinkweis, is graphic card mining dead now as you predicted? What would you say is the minimum investment needed to truly get into (hopefully) profitable bitcoin mining?

  4. I want to get started in this,

    My rig is as follows –

    AMD FX 6 Core
    Sapphire HD7850 2GB
    16GB Corsair Vengeance

    Would I stand much chance?

    Thank You for any replies.

  5. I’m just looking into starting to mine so the setup I have right now is as follows:

    AMD FX 4170 Quad Core (4.2 GHz)
    2x ATI Radeon 7770

    Is this worth starting with for now?

  6. So, I’m late to the game but I have researched it to death this last week. Here is my question, there are 12 million Bitcoin in circulation now and only 21 million going to be released totally. But coins are rewarded for mining which basically using your computer power to verify transaction performed. So what happens when 21 million is reached and no more Bitcoin are released for mining and people quit using there computers to verify transactions. The whole Bitcoin system will collapse unless people are willing to let power of their computer keep working for no Bitcoins. Is this not a correct assesment? If not.please correct me.

    • replytorobert from2yearsago on

      Yeah, it would be pretty bad if what you say were to pass but your information is incomplete. After all have been made, miners make “profit” from transaction fees.

  7. Great post!

    I suggest you guys try a new way of mining bitcoins.

    You purchase your GH/s like stocks on the market, the moment your order gets filled it starts mining for you automatically without you having to invest in hardware or wait for delivery.

    The obvious benefit is that you can sell back your GH’s anytime you want, like I say, as on the stock market. Check it out, its pretty cool: http://goo.gl/68IP2B

  8. Thinkweis have you looked into butterfly labs rentals at all? They will be offering to rent equipent / hash power. Customizable from 1GH/s up to 100TH/s.

  9. MarketIsChanging on

    Much has changed since June 2011!

    How relevant is the information in this post now in Dec 2013?

    I kick myself for not getting ‘involved’ back in the early days but hey, that’s life…

    Realistically, what ASIC hardware is now required to mine with any degree of success?

  10. All this BS will end up on American Greed someday with about a billion people in tears….I can see it coming. Mining….lol. It appears you have better “luck” if you go to a local casino and put your bitcoin on red.

  11. Hi Thinkweis

    This was a very well written and helpful article I see that the first replies were in 2011, we are now on the verge of 2014 once we are over with xmas, I have heard things about bitcoin just over this last year, but only now looked into the aspects of bitcoin mining. I have a fairly good high spec machine.
    Motherboard – ASUS Crosshair V, CPU AMD FX series, 120gbSSD, 2TBHDD, 1020w PSU, 12GB RAM, ASUS HD6950 Direct CU ii 2GB DDR5 810/5000 MHz VideoCard.

    I would be happy in just earning a few bitcoins to keep for investment and maybe sell off a handfull for a small profit, to dip my feet in it.

    In your opinion, Today, would it be worthwhile for someone like me (amateur) in joining a POOL and start mining? or have i missed the boat.

    Also i was wondering if you know any websites that show the live bitcoin value and charts over time for up to say 12mnths?

    Also curious in the method to convert bitcoins into cash in your hand.

    Regards Jason
    from NZ

  12. Since SilkRoad is gone I might start bit mining(reason I didnt start was it was connected)… I was wondering on average how many bitcoin a rig with these specs would generate on your ‘Shared computation pool’ per 12 hour shift….I cant figure it out at the moment because im reduced to my tablet till my machine is running. Hope to hear back from you. Thanks for your time :3

    Otherwise I might sighn up to fold instead. Cause proteins are complicated.

    My Rig:
    Amd Vishera
    Raedeon 7970
    32 GB ram

  13. Today morning I read about Bitcoins. Then i search the net. Thanks for giving useful informations.
    Can you share the minimum specifications of a computer system which can contribute some to the mining pool.
    I have a windows 7 pc with 2gb ram with Intel core2 processor. Can I start to work in a pool with my pc?

  14. Hi Thinkweis,

    Great website. I am definitely late on this bandwagon and really kicking myself for it!

    I had a quick question – Is it even worth trying to join a pool when I have a laptop with:

    Intel Core i3-2328m (2.2GHz, 3MB L3 cashe)
    Intel HD Graphics 3000, up to 1760 MB Dynamic Video Memory
    4GB DDR3 Memory
    Acer Nplify 802.11b/g/n

    Much obliged!!

  15. Thinkweis,

    How much many have you made of this with the current value of a bitcoin?

    You invested well!

    Is it even worth to still invest? Because its harder to crack these codes now.

  16. Hi there, i just finished downloading the bitcoin wallet, and the client is up to date.
    I’m not sure how to get the wallet address, as mentioned in your post “click “New” to get your wallet address”. i cant locate this “New” key, please could you expand on this.

    Thanks in advance.

  17. Hi,

    sorry for the dummy question,

    If I got it right, I can get bitcoin for sharing my computation resources in a grid?

  18. im so lost….I don’t know what im doing. I downloaded easyminer I have a wallet and I have an account with you and eclipse…but I don’t know what to do next? I registered the workers on yalls. but im not seeing anything happen?

  19. Hi, I’m new to Bitcoin mining. First I want to say this page has a universe of info and has me feeling more prepared for bitcoin mining. Thank you for all your work on it. I have a few questions:
    1. Are the Butterfly Labs 25 or 50 GH/s miners worth getting at this point?
    2. Does it matter what kind of computer I hook the above miners up to? Mac/PC, processing power, ram etc?
    3. Are they easy for a non-tech person to set up and connect to a wallet?

    Many thanks.

  20. David Mckinley on

    hi sorry about typos but on mobile 🙂 but thanks for this info. still learning bt this bn great read. 🙂 i have few questions id like to ask (bk at desktop) if youre ok with emailing me 🙂 thanks for info again anyway

  21. I posted a question and was it listed but seems to have been deleted and not answered. I was questioning how Bitcoin would work once all 21 million Bitcoins are out?

  22. I’m considering buying a butterfly labs 25gh/s , or 50gh/s. What are basic cpu requirements? can I buy a cheap netbook for example and use it with my asic to mine or do I need something more pawerfull

    thanks

  23. I’m considering buying a butterfly labs 25gh/s , or 50gh/s. What are basic cpu requirements? can I buy a cheap netbook for example and use it with my asic to mine or do I need something more powerful
    Your answer didn’t mention at all which computer I have to use????
    thanks

  24. Hi, and thanks for a truly awesome site.

    I am just now taking an interest in mining. Since bitcoins lately have exploded in both value and interest all around the world, and since this already has been going on a few years, I have a couple of questions.

    1. Is mining still something worth starting up with?
    2. What equipment would you recommend today for a budget of around $1 000 or $2 000? Or is that even enough anymore?
    3. I know this might be a little sensitive, but could you possibly tell us, in all your time as a miner, how much you have totaled so far?

    Also, I run a webshop and I just included payments via BitPay. Would you recommend settlement in BTC or USD?

  25. People hear me,

    Don’t be greedy and don’t invest ANY real dollars into this shit. It is just another pyramid scheme. A big fraud, only this time digital and over the net!

  26. Is there a walk through for setting up a mining client in linux xubuntu and windows? That works well on ATI card?

  27. I am a an investor with a decent portfolio, and I want your opinion on ButterFly Labs mining contracts?
    What are they really?
    Are they profitable?

  28. hi.

    I know youve siad gpu mining is dead. but is it worth it at all to mine with a hp laptop with a 5*** amd gfx.

  29. Damn. Set up 3 wallets on 3 systems. 2 XP and 1 Win7. Took forever. Then got the miner and all 3 systems said nothing but Nothing to mine for 3 weeks. Went to all those FREE BITCOINS sites and am now riddled with spy ware and viruses! Got that OpenCL but, man, you got to be a programmer figure that out. Meanwhile I am watching the bit coin raise in value. I thought there was no inflation in this Bit Coin universe? Just got frustrated and removed all programs and life is simple again.

  30. Andrew Wiseman on

    Thanks for this overview. What I don’t understand is what the purpose of the mining is? Your computer is solving math problems, correct, but for what? Why would the people who run Bitcoin want these problems solved?

  31. hey nice article,
    I am new to this bit coins stuff and don’t know much about it.I actually giving a seminar on this topic in my college,so am researching on this topic.
    i have read all your comments and got some info so far.
    but one thing I didn’t get so far is what actually happens in the mining software,you get bit coins that’s not an issue.but what does the mining software decode actually what data its working on.i saw on a video tutorial that you discover bit coins when you mine. I wanted to know ,what algorithm does it crack or decode.what data this highly encrypted files contain.does any on questioned about it.

    am just new to this topic so please help me understand this and sorry if am being lame.
    -Cormac

  32. Kenyan_Stallion on

    I’m new to Bitcoin mining and am still not entirely sure how to proceed with this.

    In terms of hardware, I have a MacBook Pro but what I am concerned about most is the need for internet speed / bandwidth. In Kenya this isn’t yet as advanced as in the Western world.

    Would you recommend I proceed with the steps outlined on: www dot bitcoinmining dot com slash getting-started

  33. Hi dear.
    I have tried to mine some bitcoins, but since I installed the engine, my computer is invaded by some archive that doesn’t allow me to enter to my mail and some other pages, and it doesn’t remember the router’s code. Has it happened to any of u?
    Thanks

  34. Hi, just started to mine with a 200GHs Avalon2 miner. How can I see how much this miner is producing? I guess need to watch the interface somewhere but not sur ehow to do it. Thnks a lot!

  35. Alastair Micallef on

    OK i installed the client you post here but when i tried to create a new address i can’t find the new button
    where is it?

  36. Cobra11Murderer on

    ok, ive been hearing about this for years now and prob way to late into the game.. but I was wondering if I should try?

    Dell XPS 410
    Q6600 2.13 ghz
    ATI 5670 Sapphire 1GB GDDR5
    375 Watt stock powersupply
    6gb of ddr2 ram

    is it worth getting into a pull or no? I would guess the only thing that would eat power in my rig is the Q6600… but idk for sure.. any ideas?

  37. I would like to suggest that you include a new page intended for applications developers that want to use bitcoin.

    Now with stuff like Counterparty (XCP), ColoredCoins, and Mastercoin (MSC), developers can use Bitcoin to create all sorts of tokens that can be used in games, finance, content demonetization, cloud services – only our minds are the limit.

    Also this is very good for miners since these protocols encourage people to pay mining fees in some instances in order for the protocols to work.

  38. Alisa Klein on

    Hello,

    You mentioned solving algorithms is involved – is this something computers do or is it human brain power manually solving them? I am very def math incompetent – as in I barely passed my algebra 1 class about 30 years ago, opted out of the college path permanently and don’t even remember anything from that algebra class today. Does bitcoin mining require excellent math skills?

  39. Hi Thinkwel

    I am very new to this bitcoin market, I found few sites who are giving away bitcoins for clicking ads and for playing games and have started earning in sathoshi

    I really am looking to learn on how to mine bitcoins of my own, I got into a site bitcoinplus.com I think this is a pool – but am not able to click start the generate button, it says java and java applets required, but my browser blocks running java says it is vulnerable

    Can you pls guide me on how to run java and use this site to generate bitcoins rather mine bitcoins

    also pls provide alternative ways to mine bitcoins, keeping in mind that am from India and mining hardware are not found here and if I spend $$ i would end up spending heavy amounts …

    It would be nice if you can mail me at [email protected]

  40. Hi I am looking at getting in to mining. Right now my hardware/ CPU options are as follows.
    iMac: 3.2GHZ Core i3 with 8GB Ram and 512MB Radeon HD5670
    MacBook ProRetina: 2.4GHZ Dual-core Intel Core i5 (TurboBoost 2.9GHZ) with 4GB 1600MHz Memory and Intel Iris Graphics.
    I will likely purchase some additional hardware to support moving forward but which machine would you suggest I use as my base. Also any recommendations on hardware specific to Mac would be greatly appreciated. I am looking for best bang for buck and have limited knowledge.
    Thanks,

  41. I have several older/out-of-date computers just lying around. Can I setup a mining pool of my own. How would I go about doing that?

  42. can i mine start with with two desktops?
    What speed of internet connection required?
    How much data it consume per day joining a pool?

  43. Richard Maxwell on

    Hey I’m Richard,

    To be honest I’m searching for the easiest way to get some Bitcoins without scamming and sh*t like that.
    After few weeks I found this site freebitco.in

    Don’t want to advertise this side but I earned 0.37129 Bitcoins on just 3 days without making any deposit! 🙂
    So feel free to try it out..you have nothing to lose and hope fully I could make your life a little bit easier 😉

    Stay clean and don’t let anyone scam you!

    Cheers
    Richard

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Beginner’s Guide to Mining Bitcoins

time to read: 5 min