How Can I Mine Bitcoin?

Last updated on 12/18/2018

If you’ve dabbled in the world of bitcoin investing, you’ve probably purchased your bitcoin on an exchange. Today, exchanges are the easiest and fastest way of acquiring bitcoin.

But exchanges are not the only means of obtaining bitcoin. You can also mine bitcoin. Bitcoin mining entails competing with other miners to find new blocks to claim newly created bitcoin. (By mining, you also perform computational work that helps to maintain the integrity of the existing Bitcoin blockchain, so you can take pride in the fact that you’re helping to make the blockchain secure.)

Can I Mine Bitcoin Myself?

Bitcoin mining has become considerably more expensive in recent years than it was in the early days of cryptocurrency, and with the incredible amount of energy dedicated to mining bitcoin at mining farms, it does not make much sense to mine bitcoin in the comfort of your own home, as your chances of finding the next block on the blockchain are virtually zero. Mining bitcoin with the right equipment, however, is still possible with a significant upfront investment in mining hardware.

How Do I Mine Bitcoin?

The first step in mining bitcoin on your own hardware is to acquire the hardware you need. Once upon a time, you could run bitcoin mining operations on a regular PC using its central processing units (CPUs). Although it is still technically possible to do that today, mining from a PC is so inefficient that you would be essentially wasting your energy.

Instead, modern bitcoin miners use special devices called ASICs. ASICs, or application-specific integrated circuits, perform the calculations necessary to mine bitcoin at a very high rate.

There are a variety of ASIC mining rigs available for purchase online. Their costs vary from several hundred dollars to several thousand dollars. In general, the price of ASICs fluctuate relative to the sentiment of the overall market and also become substantially cheaper as faster ASIC miners are released.

Another approach to bitcoin mining, cloud mining, is somewhat simpler. In cloud mining, individuals contribute relatively little mining power as a large group, and in the case that one of the group receives a bitcoin reward, the total is split among the whole group.