How to Mine Bitcoins at Home in 5 Steps

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This is a step by step guide to mining Bitcoins at home

So you decide to start mining Bitcoins, great! but not so fast…

Before you even start to think about mining Bitcoins you will need figure some stuff out. But don’t worry, this guide has you covered. I’ll explain each and every step you need to take so in the end you can decide if you want to mine Bitcoins and how to do it as well.

Step 1 – I’m not sure Bitcoin mining is profitable for you

The first thing you’ll need to figure out is if it’s even profitable for you to mine Bitcoins. I’m guessing that your goal is to have more Bitcoins and that’s why you’re trying to mine them. But if you figure out how much money you’ll need to spend on mining equipment and electricity you’ll reach the fact that unless you have a huge amount of money to spend on these – you probably won’t be profitable.

In order to find out if Bitcoin mining is profitable you can use a mining profitability calculator. The process of using this tool is explained here. After playing a bit with the data in the calculator you can decide which miner you’d like to buy. If you don’t have enough money to spend on mining rigs perhaps it’s just better for you to buy Bitcoins instead of mining them.

Step 2 – An expensive mining rig is a must for home mining

At today’s mining difficulty it’s impossible to mine using your personal computer or even an old mining rig and make a profit. And when I say an “old” mining rig – I mean a rig that wasn’t built in the last 6 months.

If you’re look for a good rig I’d recommend going with Spondoolies – they makes really mean rigs (but they also cost accordingly). Keep in mind that a mining rig is not all you’ll need. These rigs require power and cooling to work better, they are also very loud. So it’s best to find a place to put them in which is cool and can supply enough electricity.

spondoolies miner SP30

If you don’t have such a place you can still host your rig at Spondoolies for a monthly fee. You may also be able to find some bargains on Ebay from companies or individuals who are selling their used equipment.

If you still can’t afford one you can try using a cloud mining company – but more on that in a later post.

Step 3 – You can’t mine alone, you’ll need a pool of miners

Even though you have a bad ass mining rig you still can’t mine all by yourself –  the mining difficulty is too high. That’s why mining pools were invented – groups of miners who mine together and split the rewards. Once you fire up the miner (explained later) – you’ll get shares for your part of the work in solving the next block of transactions.

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
  • Do they offer BTC + NMC merged mining?
  • 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.

Step 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.

Step 5  – It’s time to 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 actaully 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.

Conclusion – Perhaps you’d prefer cloud mining

This guide explained the basics of how to mine Bitcoins at home. I assume that if you are like most people – you know understand how expensive and time consuming this process can be. If you’re looking for an alternative you may want to consider cloud mining. In the next post we’ll review how this is done. If you have any more questions about how to mine don’t hesitate to post them in the comments below.

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Ofir Beigel

Owner at 99 Coins ltd.
Blogger and owner of 99Bitcoins. I've been dealing with Bitcoin since the beginning of 2013 and it taught me a lesson in finance that I couldn't get anywhere else on the planet. I'm not a techie, I don't understand "Hashes" and "Protocols", I designed this website with people like myself in mind. My expertise is online marketing and I've dedicated a large portion of 99Bitcoins to Bitcoin marketing.

26 Comments

  1. Murat Kekec on

    Do you recommend cloud mining? Have you stop mining?What do you recommend who wants to get in Bitcoin.thanks again and good luck.

    • Ofir Beigel on

      I recommend staying away from cloud mining but that’s my personal opinion. I personally think it’s mostly a ponzi scheme.

  2. There are some very good miners in China. They work hard together and the electricity is cheap. So, they do very well. But they do it more or less secretly.

  3. i am limited in bandwidth of ethernet, i have pay for electricity resale home user price, i need special hardware to mine a btc?
    and all of this is blown out with one EMS strike. NICE really NICE!
    I would love to help mankind with this – but i have the feeling of making the problem bigger.
    Sometimes i think the gold coins / silver coins did what was needed.

  4. this is awesome dude…I grow weed and other things and bitcoins by far is the safest way to buy seeds…and this video made everything easier thanks ofar!!!!!!!!

  5. I am sorry for these people who can’t make money.
    Or they are and don’t want anyone else making it.
    But look at the cost of power plus how much you could use at home.
    60,100Amp service to your house limits how much you can use for mining.
    You still have to run your normal household power .
    Plus miners still have a resell price.

    • Думаю, нужно поступить проще ! Запускать домашнюю добычу в таких странах, как моя – Украина . Цены на электроэнергию у нас намного ниже, чем у Вас и долго ещё будет оставаться такая разница ! Вот Вам и существенная экономия ! А сэкономленные деньги – это заработанные деньги !!!

  6. Captain Jack on

    I’ve been trying to get MacMiner to work on my mac, no joy. Even the author of the app was beside himself in why it wasn’t working. I’ve given up the idea of mining. I’m more interested now in the best way to incorporate crypto currency in my business model. So many choices, options, and pro/cons its difficult to make a quick decision and move on. The idea of crypto currency is still in its infancy.

    • Hey Captain Jack.. I too want a business model accepting coins only. So, what ever you find out please share. I thank you. Oscar from China.

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  8. Never been a part of a pool of miners. I wonder how the shares are calculated. How does the computer calculate how much you should receive when the Bitcoins are mined?

  9. Christopher Allen on

    Cloud mining is definitely the way to go! If you want to waste hours and pay hefty energy bills, then stick with home mining. I’ve done home mining and while I’ve made some profits from it, that was a long time ago. Since I’ve started cloud mining I never looked back!

  10. Thank you for including so many helpful links in this article! Have you used 50Miner? It looks good to me but wanted to know your opinion on it.

  11. Eugene Campbell on

    I am on the fence whether or not to start doing this. You need a lot of expensive equipment and you need a pool of miners (which reduce your earnings), so how can this still be profitable? How can home mining still be done by so many people? Why would I do this?

  12. Are you kidding me?! The SP35 YUKON POWER is $3,595!!!
    WOW! That’s a lot of dollars! How many Bitcoins can you possibly mine in 2+
    years to even consider making such an investment?

    • I think the question is not only how many Bitcoins you can mine but also what will be the Bitcoin price. There are 2 variables that make the decision of buying a rig hard.
      1. What will be the difficulty of mining in X years ?
      2. What will be Bitcoin’s exchange rate in X years ?

      For example – If 1 Bitcoin will be worth $1,000,000 in 5 years than even if you’ll mine 0.01BTC in a year it will be worth the investment. But you are correct – the prices are pretty steep, mostly because these are super computer that are doing the job and they are specifically designed to mine Bitcoins.

  13. Dylan Gonzalez on

    For anyone trying to get into home mining I just have this advice: don’t! Just don’t waste your money on buying an expensive gig because it’s not worth it anymore. It was a while back but times have changed and you shouldn’t waste your time on this. I’ve tried it for the last 20+ months and it was good while it lasted but now…

    • Murat Kekec on

      Thanks Dylan for warning.Do you recommend cloud mining? Have you stop mining?What do you recommend who wants to get in Bitcoin.thanks again and good luck.

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