While there are many beliefs that you need to have a huge and expensive setup to mine Bitcoin at home, that is not entirely true.
While the odds are pretty slim of making money mining bitcoin as a small home miner, it provides a great way to learn more about bitcoin, and you never know you might still end up finding a block and receiving that 6.25 BTC block reward. . .
In this guide, you will learn what Bitcoin mining is and how it works. and how you can mine at home.
What is Bitcoin mining?
Bitcoin mining is the process through which Bitcoin transactions are processed, new blocks are added to the Bitcoin blockchain, and new Bitcoin units are brought into circulation.
Mining is a technical process that involves the use of computational power, commonly known as hash power, through specialized mining hardware to solve complex calculations. Bitcoin miners contribute huge hash power and compete with each other 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 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 to earn Bitcoin rewards.
How to set up a Bitcoin mining operation at home
Now that we know what bitcoin mining is, let’s take a look at 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 bitcoins. While a desktop computer can technically be used to mine Bitcoin, it is highly unlikely to bring you BTC rewards. Therefore, you will need to invest in a hardware setup specifically designed for Bitcoin mining.
As a beginner, you don’t necessarily need to buy ‘new’ hardware. Instead, you can buy used hardware online to save money.
However, given how technical and complex mining can be, depending on your level of computer knowledge, it is advisable to spend some time learning the basics of mining to ensure you know how to properly run your specific setup.
Factors like cooling and electricity costs in your area will play a role in your mining setup, for example.
Second, get yourself a Bitcoin wallet, in case you don’t already have one. In this way, if you can successfully mine a block of Bitcoin, you can receive payments to 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 wallet, you will need to set up your mining software.
Depending on whether you want to solo mine or join a mining pool, you’ll need to look at the technical aspects of each option and establish what works for you. This will also affect the software you choose.
There are plenty of free bitcoin mining software that you can download and use. Each mining software uses a specific operating system. For Bitcoin, there are several types of software that can be used, but some of them can affect your mining activities.
Last but not least, once you have done the above steps, you are 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 on your part.
Will you make money as a miner at home?
By now, you must be wondering if you will be able to make money if you start mining bitcoins at home. Well, probably not.
But, there is a small chance that you will end up finding a block as a solo miner. It has happened before.
For example, in January this year, a lone miner who had a computing power of just 126 TH was able to find a Bitcoin block and earned $266,870 worth of BTC as a reward.
A week later, another solo miner was able to successfully mine a Bitcoin block with only a hash rate of 116 TH, thus earning almost $267,500 worth of BTC.
Once again, just ten days later, another solo miner using only 86 TH of computing power was able to earn $215,000 worth of BTC for completing another Bitcoin block.
While all three of the aforementioned winners were able to mine bitcoins as individual individuals at Solo CK Pool, a Bitcoin mining pool software project that helps those interested in mining go it alone rather than having to join a mining pool, it is still possible for one to mine bitcoin just using whatever software works for you.
So should you mine Bitcoin at home? It all comes down to your personal decision.
If you want to mine bitcoins because you think it will make you rich, you’re probably banking on buying and holding bitcoins instead because, with a small home mining setup, you’ll most likely struggle to make a profit (taking electricity and utility costs). facility). consider).
But if you want to learn more about bitcoin, digital currency mining, and the technology behind it, then mining can be a great way for a newcomer to interact with Bitcoin.