A guide for new hobby miners

Although there are many beliefs that you need a big, expensive setup to mine Bitcoin at home, that’s not entirely true.

Although the chances of making money mining bitcoin as a small miner at home are quite slim, it provides an excellent way to learn more about bitcoin and you never know, you may still end up finding a block and receiving it the 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 introduced into circulation.

Mining is a technical process that involves the use of computational power – often referred to as hash power – via specialized mining hardware to solve complex calculations. Bitcoin miners contribute extensive hash power and compete against each other to find the next block to win the block reward. The first miner to confirm the next Bitcoin transaction block receives 6.26 BTC as a reward. The reward will decrease 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 rewards in Bitcoin.

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.

First, you need to choose the hardware you want to use to mine bitcoin. While a desktop computer can technically be used to mine Bitcoin, it is highly unlikely that it will give you any BTC rewards. You therefore need to invest in a hardware setup that is specifically designed for Bitcoin mining.

As a beginner, you don’t necessarily need to buy “new” hardware. Instead, you can buy already used hardware online to save money.

However, given how technical and complex mining can be – depending on your level of computer knowledge – it’s advisable to spend some time learning about the basics of mining to ensure you know how to run your specific setup correctly.

Factors such as cooling and power costs in your area will play important roles in your mining setup, for example.

Second, get a Bitcoin wallet, in case you don’t already have one. This way, if you are able to mine a Bitcoin block, you can get paid 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 that you are in control of the bitcoin you receive.

Third, now that you have your hardware and wallet, you need to set up your mining software.

Depending on whether you want to do a solo mine or join a mining pool, you need to look into the technicalities of each option and find out what works for you. This will also affect the software you choose.

There are tons 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 the above steps are done, you will now be ready to mine Bitcoin. But before that, make sure you download Bitcoin’s local copy of the blockchain. Your miner will now be ready to mine Bitcoin 24/7 without much supervision from you.

Do you want to earn money as a miner at home?

Now you are probably wondering if you will be able to make money if you start mining bitcoin at home. Well, probably not.

But there is a small chance that you can end up finding a block as a solo miner. It has happened before.

For example, back in January of 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 mine a block of Bitcoin with only a hash rate of 116 TH and thus earn almost $267,500 in BTC.

Once again, barely ten days later, another solo miner using only 86 TH of computing power was able to earn $215,000 in BTC for completing a new Bitcoin block.

While all three aforementioned winners were able to mine bitcoin as individuals on the Solo CK Pool—a Bitcoin mining pool software project that helps those interested in mining go it solo instead of joining a mining pool—it still possible for one to mine bitcoin solo using the software that works for you.

So, should you mine Bitcoin at home? It all boils down to your personal decision.

If you want to mine bitcoin because you think it will make you rich, you are probably betting on buying and holding bitcoin instead because, with a small mining setup at home, you will most likely struggle to make money (taking power and setup costs into account) .

However, if you want to learn more about bitcoin, digital currency mining and the technology behind it, mining can be an excellent way for a newcomer to interact with Bitcoin.