A guide for new amateur miners
Although there are many beliefs that you need a huge and expensive setup to mine Bitcoin from home, this is not entirely true.
While the odds are pretty slim of making money mining bitcoin as a small home miner, it’s a great way to learn more about bitcoin, and you never know, you might always end up find a block and receive this block reward of 6.25 BTC. .
In this guide you will learn what bitcoin mining is, how it works. and how you can mine at home.
What is Bitcoin Mining?
Bitcoin mining is the process by which Bitcoin transactions are processed, new blocks are added to the Bitcoin blockchain, and new units of Bitcoin are released into circulation.
Mining is a technical process that involves the use of computing power – commonly referred to as hash power – through specialized mining hardware to solve complex calculations. Bitcoin miners contribute expansive hashing power and compete to find the next block to earn the block reward. The first miner to corroborate the next bitcoin transaction block receives 6.26 BTC as a reward. The reward will be reduced to 3,125 BTC by 2024 through a process known as the block reward halving. The halving process takes place every four years.
As a bitcoin miner, you can choose to go it alone or be part of a mining pool in order to earn bitcoin rewards.
How to Set Up a Bitcoin Mining Operation at Home
Now that we know what bitcoin mining is, let’s see how to set up a bitcoin mining operation at home.
To get started, you will need to choose the hardware you want to use to mine bitcoin. Although a desktop computer could technically be used to mine Bitcoin, it is highly unlikely to earn you BTC rewards. You will therefore need to invest in a hardware configuration specially designed for Bitcoin mining.
As a beginner, you don’t necessarily need to buy “new” hardware. Instead, you can buy used gear online to save money.
However, given the complexity and intricacy of mining, depending on your level of computer literacy, it is advisable to spend some time learning the fundamentals of mining to ensure you that you know how to properly run your specific configuration.
Factors such as cooling and electricity costs in your area will play a large role in your mining setup, for example.
Second, get a bitcoin wallet, in case you don’t already have one. This way, if you manage to successfully mine a Bitcoin block, you can get paid out of your wallet. This can be a separate wallet from the one you use for day-to-day transactions, and should ideally be non-custodial so you have control over the bitcoin you receive.
Third, now that you have your hardware and your wallet, you will need to configure your mining software.
Depending on whether you want to mine solo or join a mining pool, you’ll need to look into the technical details of each option and establish what works for you. This will also have an impact on the software you choose.
There are plenty of free bitcoin mining software you can download and use. Each mining software uses a specific operating system. For Bitcoin, several types of software can be used, but some of them can impact your mining activities.
Last but not least, once the above steps are completed, you will now be ready to mine Bitcoin. But before that, make sure to download the local copy of the Bitcoin blockchain. Your miner will now be ready to mine Bitcoin 24/7 without much supervision from you.
Will you make money as a home miner?
Now you must be wondering if you will be able to make money if you start mining bitcoin from home. Well, probably not.
But, there is a small chance that you will end up finding a block as a solo miner. It’s already arrived.
For example, in January this year, a solo miner who had a computing power of only 126 TH, was able to find a Bitcoin block and earned $266,870 in BTC as a reward.
A week later, another solo miner was able to successfully mine a block of Bitcoin with only a hash rate of 116 TH and thus earn almost $267,500 in BTC.
Again, just ten days later, another solo miner using just 86 TH of computing power was able to earn $215,000 in BTC for completing another Bitcoin block.
While the three mentioned winners were able to mine bitcoin as single individuals on Solo CK Pool – a bitcoin mining pool software project that helps those interested in mining to get into it solo at instead of having to join a mining pool – it’s still possible for one to mine bitcoin solo using whatever software works for you.
So, should you mine Bitcoin at home? It all depends on your personal decision.
If you want to mine bitcoin because you think it will make you rich, you’re probably betting on buying and holding bitcoin instead because with a small home mining setup you’ll probably struggle to make a profit (taking electricity and installation costs into account).
But if you want to learn more about bitcoin, digital currency mining, and the technology behind it, mining can be a great way for a newcomer to interact with bitcoin.