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Beginner’s Guide to Mining Bitcoins

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 our best Bitcoin mining pools review or 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 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!!

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570 comments on “Beginner’s Guide to Mining Bitcoins”

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  1. Thanks for writing this great article! It’s very informative, and you included some great points to the equally great article. Great read! **link removed**

  2. So, my electricity is included in the cost of my rent. I pay the exact same thing if I turn the electricity off for a month as I would if I turned the heater all the way up, the AC all the way down and every device in my home on. With this in mind, I’m thinking if I even got a fraction of a fraction (see what I did there?) of a bitcoin with my laptop, it would be something more than I had if I had not been mining at all?

    1. Hi Yorick,

      While it’s technically possible to mine Bitcoin on a laptop, it won’t be at all profitable. You’d be far better off mining something like Monero, which might at least produce a few cents or even dollars per month…

      Still, if you really have free power, you could try getting hold of a second-hand ASIC for mining Bitcoin. The older models go pretty cheap on eBay and similar sites, as they’re not profitable if one has to pay for power… You could even use them as heaters in the winter. The one problem is that they produce a lot of noise.

      1. Yes, I came to that conclusion, myself, earlier today. I listened to the noise of an octal GPU rig and then they compared it to the noise of a single ASIC… I was immediately convinced that this would not be for me. My neighbors on both sides, above and below me would be ready to kill me. Heat, too, is a concern. I don’t mind the heat, personally, but the electronics…that’s a different story. I know how important it is to cool those things; I’m not well versed in thermodynamic engineering. I think heat is more of a concern for GPU rigs than for ASICs unless you start getting several ASICs in tandem; but if done right, I might still be able to do ok with a dual GPU rig. I was looking at something called Etherium or something like that. I’ll look into Monero too. Thank you for the reply.

        1. Hey Yorick,

          Yeah, your neighbours might complain about that whining noise and it would probably bother you and anyone else in the place. A GPU mining rig sounds like the way to go! You could always vent the heat out a window? I don’t think GPUs will produce much environmental heat – I’ve been to LAN parties where people were gaming for hours in a fairly small room and it didn’t become noticeably hot. So long as the GPU itself stays cool, it shouldn’t be a problem running a dual RIG.

          Right now, I believe Ethereum is the most profitable coin to mine with a GPU, however this changes all the time. See here for a list of all the coins you can mine (certain pools like Nicehash will auto-switch your hashrate to the most profitable one and pay you out in Bitcoin) and their profitability ranking:

          https://btcgo.org/coin/mining/Gpu/

    1. Hey,

      for you it will be better to mine Monero. Wenn you don’t have a special Mining Hardware like Antminer, it makes no sense at all to mine Bitcoin.
      But Monero is the best for mining with normal PC Hardware. If you want, you can withdraw it then or you put it in online Mining plattforms. There you can mine Bitcoin then.
      **link removed**

      I hope, i could help you.
      Bernhard

    2. Hi Surya,

      Yes, that laptop will be able to mine GPU and CPU-mineable coins. Note that any coins for which ASICs are available – e.g. Bitcoin, Litecoin, Dash, Bcash, etc. – will be completely unprofitable to mine. However, this leaves many other coins which you may be able to earn a profit on.

      See this page for GPU-mineable cryptos (I think these will be your best option) ranked by profitability:

      https://btcgo.org/coin/mining/Gpu/

      Note that the profitability of these coins changes constantly. You may be best choosing and sticking with a coin which you believe in.

    1. Hi Stefano,

      No, each type of miner can only mine a specific algorithm. Many coins share algorithms, for example Bitcoin and most of its forks (eg. Bcash) use the SHA-256 algorithm. Litecoin uses Scrypt, Ethereum uses Ethhash, Dash uses X11 and so on.

      Bitmain has different ASIC miners out for SHA-256, Scrypt, X11 and I think at least one more algo.

  3. What kind of internet connection (speed) do you need to be successful? We only have about 15Mb fibre here… And does the speed make a difference to the amount you can earn?

    1. Hi Rob,

      That speed will be more than sufficient! You only need enough to stay synced with the blockchain – in Bitcoin’s case, each block is a bit over 1 meg which should be downloaded in seconds on a line like that. Any modern internet connection should be fine for mining purposes.

  4. I bought PC for gaming but now I’m thinking for extra income, I would like to know if I can use my PC to earn Bcoins, and how can I do that? any suggestion? specs intel g4400 3.3 ghz, 8gb ram, 1050ti 4gb gpu, 500watts tru rated PSU

    Once I have enough money I would like to buy mining rig, newbie here

    1. Hey Audiner,

      No, you won’t be able to mine bitcoins on a PC. You need special hardware for Bitcoin mining, called an ASIC. See here for more details:

      https://99bitcoins.com/bitcoin-mining-worth-it/

      Of course, you can use the PC to do work for people who will pay you in BTC. Here is an article on earning BTC for doing work online:

      https://99bitcoins.com/how-to-earn-bitcoins-fast-free/

      Finally, you can use your PC to mine altcoins. I’m not sure you’ll make quick money but, if you have cheap enough electricity, you should make some money. For a list of GPU-mineable coins, see here:

      https://btcgo.org/coin/mining/Gpu/

      1. ToasterLightning

        Well you could mine bitcoins. I doubt it would be profitable though because of the electric costs. Besides, bitcoin mining can overheat and harm your computer. I think you should use it for gaming. Gaming is fun!
        p.s. Do you play Minecraft?
        p.p.s. I like to lick windows

        1. Hi Igor,

          That’s right, while it’s techincally possible to mine Bitcoin using your CPU / GPU, you will do so at a loss due to the costs of electricity. It’s true that mining will also wear out your system over time.

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