How to do bitcoin or cryptocurrency mining from home

Bitcoin mining, or cryptocurrency mining is a very popular term. Everyone on the internet wants to mine bitcoins and get rich. As the value of one bitcoin is over $ 55,000 at the moment, it is fairly obvious how much money one can make by mining a certain portion of it.

If we draw a parallel, it is same as people mining for diamonds back in 19th century in South Africa and some of them getting lucky. Except for the fact that bitcoin mining is all done online and you don’t need to dig the ground to find some bitcoin, everything remains same.

Earlier when bitcoin was new, unpopular and cheap, bitcoin mining was unchallenging as competition was less. Today when the scenario has taken a complete U-turn, it gets as difficult as possible. However, it is only difficult and not impossible so without any further delay, let’s get to the work where we talk about how to do bitcoin or cryptocurrency mining from home.

The concept of Mining

Mining is a popular term to reward the accounts who solve the complex mathematical problems fastest on the blockchain which ultimately helps in maintaining the ledger on the entire network. It works as an incentive to people who don’t trade cryptocurrency but still want to own it. All they have got to do it to solve a random mathematical problem using their computer.

For more on the concept of mining, click here

What do you need for mining?

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The FPGA Miner (on the left) and ASIC Miner (on the right)

The question that arises now is if mining is all about solving mathematical problems, why don’t just the nerds, the winners of math Olympiads try their hands out at it since they will have a better chances in succeeding. Well, things are not as simple as they look in the first glance. Let’s take a look at what are the equipments one needs to mine cryptocurrency.

In the early days of crypto when there was no real competition out there, people could mine them using their personal computers which have Central Processing Units called CPUs. As the difficulty increased, the demand for having a quicker and powerful device also increased which led to the birth of Graphic Processing Units (GPUs).

Once GPUs got older and easily accessible to all, people moved to FPGA which is a hardware device used for computing complicated calculations. They were harder to configure which is why they were not that common in use. But people moved past FPGA too and today the mining is done on ASIC network. ASIC stands for Application Specific Integrated Circuit and as the name suggests, it is a hardware made with only one purpose, which is to mine cryptocurrency.

You can have either one of these devices and you are good and ready to mine bitcoins although the more evolved your hardware is, the better your chances at mining are.

How to mine?

Mining has two concepts – A) Solo mining and B) Pool mining. In solo mining, you mine alone and in pool mining, you mine with a group, which is slightly more convenient but less rewarding- the choice is yours. Let us talk about mining in a group first before we move to solo mining.

Mining Pool

If you’re using your personal computer to mine bitcoins, fine but your chances of succeeding are bleak since there are thousands of miners competing against you with much more powerful devices than you. And even if you upgrade your device from personal computer to ASIC hardware, which will cost you several hundred dollars to ten thousand dollars, not to forget the cost of electricity it will consume, you will be at a huge disadvantage as a rookie who will be competing against a huge number of professionals.

One way to overcome this obstacle is to join a mining pool and mine as a group. Once the group mines successfully, the reward is shared among the whole group based on the mining powers of each member. So in that case, even if you are a noob and small miner with a computer at home, you are contributing to the pool with your mining powers for which you will get rewarded with your share.

How to do bitcoin or cryptocurrency mining from home
Here is the latest distribution of Mining Pools across the globe based on their popularity among users. Data Source : Buy Bitcoin Worldwide

Surely, the rewards are shared among the group members making it a less profitable entity but compared to the challenges you face in mining solo, it still looks a very convenient and very cheap method. Below, we share a list of some of the major mining pools in case you have made up your mind on mining in a group.

Solo Mining

However, in case you want to gain huge profit from mining crypto, mining solo is obviously the best option. It is obviously a very expensive method where you need to be ready to bear the high costs of an ASIC device (for better chances at succeeding) and electricity along with the cost of software you need to join in order to mine crypto (some of the softwares are free too). But once you think you can bear these expenses, you should go ahead.

Some of the most popular softwares are Kryptex ,BeMine ,Ecos , Hashing24 , Hashflare , Minergate , NiceHash and Slushpool. You have to make an account on one among these abundant options.

Once you decide to mine solo, you will need to choose a software and create a wallet which will store all your mined bitcoins. You will get your wallets for free and very easily nevertheless. Some of the most common software wallets are Electrum, Exodus, Binance, Coinbase while just like your regular market, you will get a lot more options in this crypto market too. You will need to link your chosen wallet with your chosen software.

A better alternative for mining bitcoins solo is that you start mining for altcoins. For sure, they are not as expensive as bitcoin but given the volatility of cryptocurrency, no one knows when their stakes will rise dramatically. Also, the fact that the competition is less in mining altcoins compared to the struggle you face with bitcoin mining makes it a safer option. The chances of you succeeding at mining altcoins is lot higher.

Is Mining profitable

This is the most common question among the beginners who are interested in mining and it should be. There is no straight answer to this as it depends upon various factors.

Even in pool mining, the pool you join takes a certain fee for providing its services which means you have to share your reward with the pool too along with the group members.

If you are mining solo, along with your costs which we discussed earlier, you need to keep in mind these factors to calculate your mining profit or loss.

Block reward

Block reward is simply the reward one gets for mining bitcoins. It keeps decreasing in a periodical and proportionate way which means the value of each block reward changes after every 2,10,000 blocks (approximately 4 years) and the reward gets halved. Initially, the block reward was 50 BTC, then it changed to 25, then 12.5 and currently, in the 2021-2024 circle, a miner gets 6.25 bitcoins as block reward.

Since, the value of one bitcoin is over $ 55,000 at the moment, the value of one block reward will be equal to $ 343,750 which is an enormous benefit at the first glance but it is not.

Electricity cost

So far, we have not talked about how much electricity an ASIC can consume but you should be fully aware of it. A single ASIC can consume electricity equivalent to what 500,000 Playstation devices do and even if you’re getting the cheapest electricity in some corner of the world, it will cost you limitless amount of real money.

Computer damage

In case you can’t have an access to ASIC and you want to pursue mining on your personal computer at home, you should be ready to make some sacrifices. With most of the softwares (some work even if your computer is idle), you will have to keep the computer on all the time which will affect its performance, making it slow and heated. Also, it is highly unlikely that you will be able to perform any other function at your computer.

And last but not the least

The fact that crypto, bitcoin in particular are extremely volatile, you can never predict its nature. Mining may look profitable today since the value of one bitcoin is over $ 55,000 but it may not hold the same value in future and your present benefit might turn into your future loss.

Other than that, you need to be vary about the fact that a huge number of miners are joining the blockchain network all the time, the challenge of mining crypto is only going to increase by the time.

Some mining scams you should be careful of

How to do bitcoin or cryptocurrency mining from home
Mobile mining drains your phone battery and affects your mobile without any significant advantage.

Off late, there have been other mining concepts apart from solo and pool mining which have surfaced in the mining world. Cloud mining, Mobile mining and Web mining are some of those concepts you must stay away from.

Cloud Mining : Instead of setting up your devices for solo mining or joining a mining pool, you pay a mining company to mine crypto for you. However, no matter how lucrative they seem from outside, they are not that profitable since they charge a hefty fee without giving you that much in return. Those who promise to do the opposite, i.e, giving you lot of returns in low fee are scams. If you still want to opt for the legitimate ones in this field, you should calculate your costs and returns very delicately.

Mobile Mining : Mining, theoretically, can be done from a mobile phone but since it has a very low processing power compared to CPU and ASIC, the chances of you getting any return at all are negligible. Instead, you can end up damaging your mobile.

Web Mining : This is a highly unethical way of mining crypto where some websites hijack your CPU once you visit them and mine crypto using your CPU without your consent. There are hundreds of such websites on the internet and you should make sure to never visit any.

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