Guide to Bitcoin Mining in 2024
Bitcoin mining plays a pivotal role in the Bitcoin network. Miners act as the backbone of the entire Bitcoin network, upholding the security of the network while ensuring nobody cheats the system.
Bitcoin mining plays a pivotal role in the Bitcoin network. Miners act as the backbone of the entire Bitcoin network, upholding the security of the network while ensuring nobody cheats the system.
Bitcoin mining is the act of running software with specialized hardware in order to validate Bitcoin transactions for the public ledger of the Bitcoin network, also known as the blockchain.
The Bitcoin network compensates these miners for their effort by releasing bitcoin to those who contribute the needed computational power. This comes in the form of both newly issued bitcoins and from the transaction fees included in the transactions validated when mining bitcoins. The more computing power you contribute then the greater your share of the reward.
Bitcoin mining, known as Proof-of-Work, pits miners against each other in a race to see who can solve a cryptographic puzzle first. The only way a miner can win the race is by iterating over as many randomly-generated solutions as possible until they land upon the correct answer.
Miners generate solutions by running a specialized algorithm known as a hash function, or hashing. Each miner, or group of miners, hashes data on high-powered machines, and the first one to land upon the correct answer wins a reward.
The hash rate is the speed at which miners execute hashing to iterate over possible solutions to the cryptographic puzzle. Currently, the entire Bitcoin network is performing 100 exahashes a second, which translates to 1020 hashes, or ‘guesses’, each second!
The fact that Bitcoin’s hash rate is so gigantic is not a mathematical curiosity, it is an essential component of the network’s security. To date, the world’s most powerful supercomputer is the Japanese Fugaku, with more than 7 million cores, and a power of 415.53 petaflops. Comparatively, the entire Bitcoin network is 194 thousand times more powerful than Fugaku.
Bitcoin mining is not easy. Competition in the mining industry is fierce and many variables need to be considered when selecting mining rigs and setting up your facility.
This guide is for anyone who is completely new to bitcoin mining. If you’re looking to mine at home to make some money or just as a hobby, we’ll tell you everything you need to know so you can start mining Bitcoin as soon as possible.
Before deciding which Bitcoin ASIC miner to purchase, you need to determine if you have the facility to properly run miners. There are 4 basic requirements:
Power: Modern miners require a 220V outlet. However, most residential homes and apartments are only equipped with standard 110V outlets. If you don’t have any 220V outlets available, we suggest hiring a licensed electrician to install a 220V outlet.
Internet: A strong and reliable connection is essential. Any downtime is lost funds. This is best achieved with an ethernet cable plugged directly into the router. Luckily, these cables can be purchased on long lengths. Meaning your router doesn’t need to be close to the miner.
Cooling: ASIC miners generate a lot of heat. Proper ventilation and fans are needed to help circulate the air.
Noise Reduction: Miners are very loud. Most miners can reach up to 90db. This is comparable to a lawn mower running inside your home. To help protect your ears, it’s recommended to put your miner in an insulated container to soundproof them.
Better known as ASIC miners (application-specific integrated circuit) are specialized microchips designed with the specific purpose of mining bitcoins. ASICs designed for Bitcoin mining were first released in 2013 and began to mine at unprecedented speeds, while consuming much less power than FPGA or GPU mining rigs. Here are some of the most popular miners currently on the market.
Released: May 2020
The latest and most powerful ASIC miner from Bitmain. With its impressive hash rate rate of 100 TH and high energy efficiency ratio of 29.5 J/TH, this miner is almost guaranteed high margins.
Released: November 2017
The Bitmain Antminer S9 is currently the most popular Bitcoin mining hardware available on the market. It features the highest hash rate of about 14 TH/sec and is by far the most efficient mining hardware available.
Released: May 2018
The Bitmain Antminer S9i is presently considered a very popular bitcoin miner. The mining hardware has eclipsed Antminer S9, which is currently sold out on Bitmain, as the largest ASIC model in the Antminer series.
Released: September 2015
The Bitmain Antminer S7 was introduced to the market in 2015. It has since become one of the most popular Bitcoin hardware miners and dominates the market courtesy of its low power consumption compared to other models.
Released: March 2018
The Dragonmint T1 is one of the most impressive mining rigs today. The hardware is efficient in terms of energy consumption and overall effectiveness. Taking into account its power consumption level, hash rate, and price, the rig offers a higher chance of profitability compared to other hardware.
Released: April 2017
The AvalonMiner 741 is a bitcoin miner from Canaan company and has an overall efficiency of 0.16 J/GH, which is higher compared to other devices within its price range. Also, this bitcoin miner offers a variety of customization options.
ASICs can either be purchased brand new directly from the manufacturer or they can be purchased used.
There is a thriving peer-to-peer market for used miners. However, they are not easily found on the web. Rather, they often take place in Telegram groups or other chat messaging platforms. You should also be aware that these secondary markets for miners can contain fraudsters, so it is strongly recommended to only purchase from verified sellers.
There are 3 main considerations before purchasing your miner:
Unit Prices The newer the ASIC miner, the more efficient and expensive it is. Don’t forget to add other costs such as shipping, import fees, duties, and taxes which are not usually included but should be factored into the retail price.
Hash Rate: Measured in TH/s (Tera hashes per second). This metric measures how powerful the miner is. The higher the hash rate, the more BTC you could earn.
Power Consumption: Measured in Watts (W), this is the amount of energy the miner will consume. The more power a miner consumes, the higher the electricity cost incurred. Converting to Kilowatt hours (kWh) and finding the electricity rate (usually quoted in kWh) from the electricity provider will determine your operating costs.
Bitmain and MicroBT are the two largest miner manufacturers on the market today.
The Antminer S9 from Bitmain has thus far been the most dependable ASIC, with many still operating today after the original release in 2016. However, the lead engineer who designed the S9, Yang Zuoxing, later left Bitmain to start and run MicroBT. He designed the Whatsminer M20S, which is widely regarded as the next-in-line for the title of most dependable ASIC model long-term.
Other manufacturers exist such as Canaan, Innosilicon, and Ebang. However, they are considered lower quality than Bitmain and MicroBT. This means models produced by these other manufacturers will not be as powerful but will come at a much lower price point.
Mining software is just as important as the hardware. The main function of the software is to deliver the mining hardware’s output to the rest of the blockchain. Bitcoin mining software oversees the input and output of your mining hardware while also displaying statistics such as hash rate, temperature, fan speed and tempo of your miner.
If you are an individual miner, bitcoin mining software connects your hardware to the Bitcoin network. If you are mining with a pool, the mining software will connect you to a mining pool.
Once you have your mining rigs and facility setup, you have the option of using custom software to control your miner. Using a custom third party software to control your miner can allow you to optimize its performance. This means you can effectively overclock your miner to make it operate faster then what the manufacturer claims.
Once of the most well known custom miner software currently on the market is the Braiins OS+. This software will run on your miner to automatically test different frequencies and voltages for your miner to find the settings that will mine most efficiently.
Braiins OS+ also implemented Stratum V2 which is a protocol focused on making data transfers more efficient, reducing physical infrastructure requirements for mining operations, and increasing security.
Below are other recommended and popular Bitcoin mining software, each coming with varying features such as remote interface capabilities, multi-GPU support, self-detection of new blocks, fan speed control, and more.
Released in 2011, CGMiner is still one of the most popular GPU/FPGA/ASIC mining software available. CG Miner is an open-source ASIC/FPGA miner written in C, cross-platform for Linux, Windows and OS X, and includes support and binaries for RPi, OpenWrt routers, and others. CGMiner is a command-line application that has full monitoring, fan speed control, and remote interface capabilities. It comes with a scalable networking scheduler that can scale to hash rate of any size without network delays.
BFGminer is a fork of CGMiner and is designed specifically for FPGA and ASICs and doesn’t support GPU mining. More oriented towards the tweaking and customizing audience, it features dynamic clocking, monitoring and remote interface capabilities. The interface is text-based, and as with CGminer, options are very clearly laid out. You can make use of hotkeys to perform routine tasks such as monitoring pools, identifying devices and enabling extra features. BFGminer can also be installed on a Raspberry Pi.
Considered one of the easiest to use, Multiminer, is a graphical application (rather than a command line utility), powerful, and simple solution for Bitcoin mining. MultiMiner is available on Windows, OS X and Linux. MultiMiner simplifies switching individual devices (GPUs, ASICs, FPGAs, CPUs) between cryptocurrencies such as Bitcoin, Litecoin, Ethereum, Monero, Zcash, and more, while also allowing you to manage any mining appliances on your network (AntMiners, G-Black, Raspberry Pi controllers, Spondoolies and more).
Now that you understand all the important factors involved in mining bitcoin, let’s help you fill out the Bitcoin Mining Profitability Calculator.
Remember, the calculator below is meant to be a quick and easy tool to determine your profitability. There are factors that are not accounted for in the calculator, meaning profitability is an estimate and should be scrutinized further if you decide to start mining.
Hash Rate: (TH/S): This is the power of the miner. This metric is often found on the miner’s description page and can also be found in our ASIC miner comparison table above.
Bitcoin Price (USD): The current market price of Bitcoin. Adjust this metric to understand how profitable your operation will become if the price were to rise or fall significantly.
Power Consumption (Watts): This is the power consumption of the miner. This metric is often found on the miner’s description page and can also be found in our ASIC miner comparison table above.
Cost per KW/h (USD): This is the hourly rate your electricity provider will charge you. You should contact your service provider to get an estimated cost on a per hour basis.
Experiment with the calculator to get an idea of how profitable your mining operation can be.
If you’re someone who isn’t concerned about making a profit, and would rather make it a hobby, then following this guide will get you on the right path to start as soon as possible. If you read this guide and it all still seems daunting to start, then buying and holding bitcoin is one of the most popular strategies to getting started with Bitcoin.
