How to Start Crypto Mining as a Beginner


Cryptocurrency mining is the process of verifying transactions and adding new blocks to the blockchain in exchange for crypto rewards. It is a key component of how most cryptocurrency networks function. As interest in crypto continues to accelerate, many new users are considering trying their hand at mining. However, crypto mining can seem complex and intimidating for beginners.

This comprehensive guide will walk you through everything you need to know to get started with crypto mining. We‘ll cover how to pick a coin to mine, choose mining hardware and software, understand key concepts like hashrate and difficulty, maximize profits, and avoid common beginner mistakes.

Brief History of Cryptocurrency and Mining

Cryptocurrency originated with Bitcoin, which was created in 2009 by the pseudonymous Satoshi Nakamoto. The first block of transactions was mined on January 9, 2009. In the early days, Bitcoin mining could be done with regular CPUs and GPUs. As interest grew, specialized mining equipment called ASICs (application-specific integrated circuits) was developed which offered far greater hashrates.

Mining secures cryptocurrency networks through a decentralized process of verifying transactions. In return, miners receive block rewards which are payments of that cryptocurrency, like getting paid in Bitcoin to mine Bitcoin.

How Crypto Mining Works

Cryptocurrency mining is the process of adding verified transaction records to the blockchain (public ledger) and securing the network. For their contributions, miners receive crypto tokens as a reward. It requires sophisticated hardware and software along with a considerable amount of computational power.

Here are the key steps:

  1. Mining hardware runs complex hashing algorithms to solve math problems.

  2. Successfully adding a block to the blockchain requires finding a hash below the target.

  3. The difficulty of the algorithms adjusts based on how much computing power is in the network. More miners means more difficult hash targets.

  4. Whoever solves the algorithm first adds the verified block to the chain and receives the block reward payment and any transaction fees.

  5. The process then repeats with the mining of the next block.

The Role and Importance of Mining

Mining serves multiple crucial functions in cryptocurrency:

  • Transaction verification: Miners verify the legitimacy of pending transactions which protects the network.

  • Supply mechanism: The block reward system releases new currency into circulation in a controlled fashion.

  • Security: Mining makes fraudulent transactions economically pointless and very difficult to execute.

In short, mining is the backbone that enables cryptocurrencies to operate securely without centralized control. Next, let‘s look at choosing a cryptocurrency to mine from the thousands of options out there.

Choosing a Cryptocurrency to Mine

With over 10,000 cryptocurrencies in existence and more emerging all the time, deciding which coin to mine can feel overwhelming in the beginning. Follow this decision making framework when selecting a cryptocurrency to maximize your mining returns:

Mine Established Coins vs. Smaller Altcoins

The most well-known coins like Bitcoin and Ethereum have much higher mining difficulty and equipment requirements today, which can make profitability challenging. However, they also have the advantage of widespread adoption and liquidity.

Alternatively, smaller altcoins tend to be easier to mine but have lower prices and credibility. Often they offer short-term spikes in mining profitability. One strategy is to mine newer altcoins when profitable and then hold or trade them for more established cryptocurrencies.

When getting started, smaller altcoins allow you to build experience before expanding to more competitive networks.

Compare Factors Like Hashrate, Difficulty, and Block Rewards

These metrics determine the earning potential and hardware needed to successfully mine coins:

  • Hashrate measures your mining power
  • Difficulty shows how competitive mining is on a network
  • Block rewards are how many coins you can earn per block

Coins with lower difficulty, high block payouts, and support for GPU/CPU mining tend to be best for beginners. Comparison sites like WhatToMine help you analyze profitability across cryptocurrencies.

Don‘t Forget About Profitability Calculations

Simple profit estimates take your hashrate and the coin‘s block reward value minus mining costs like hardware and electricity.

For example:

Hashrate = 150MH/s

Reward Per Block = 5 ETH (worth $11,000)

Electricity Costs = $5/day

Profit = $10,995 per block

More advanced estimates account for factors like the future appreciation, mining difficulty increases, and market price fluctuations.

Equipment Needs Range from GPUs to ASICs

The mining hardware required ranges considerably across cryptocurrencies:

  • Coins like Bitcoin, Bitcoin Cash, Litecoin now require expensive, specialized ASIC hardware
  • Ethereum mining has shifted from GPUs to ASICs recently
  • Smaller altcoins can still be profitably GPU or even CPU mined

Assessing your budget, desired coin, expected Return on Investment (ROI) timeframe, and technical skills allows you to choose suitable mining equipment.

Cryptocurrency Mining Hardware

Let‘s explore the mining hardware options in more detail:

ASIC Miners

Application-specific integrated circuit (ASIC) miners are specially-designed for mining particular algorithms. For example, a Bitcoin ASIC can mine SHA-256 coins like Bitcoin and Bitcoin Cash. They offer far higher efficiency and hash rates than consumer hardware components like graphics cards.


  • Very high hash rates
  • Lower power consumption = higher efficiency
  • Often easy to setup and use


  • Expensive upfront costs
  • Single algorithm limits flexibility
  • Difficult for home hobbyist miners

Popular ASIC models include the AntMiner S19 from Bitmain and the WhatsMiner M30S from MicroBT.

GPU Mining Rigs

A GPU mining rig contains multiple high-end graphics cards like the AMD Radeon RX 5700 XT or NVIDIA RTX 2070. While less efficient than ASICs overall, GPU rigs can mine various altcoins across different algorithms.


  • Mine many coins with different algorithms
  • Components relatively affordable
  • Resell GPUs if unprofitable to mine


  • High electricity usage decreases profits
  • More technical skill required
  • Slower hash rates than ASIC miners

Some examples of cryptocurrencies that can be GPU mined include Ethereum, Ravencoin, and Flux.

Mining Software

To maximize mining income, you need software for tasks like:

  • Communicating with the cryptocurrency network
  • Controlling your hardware’s activity
  • Tracking key metrics and statistics
  • Connecting to a mining pool

Mining with CPU vs GPU

CPU mining utilizes a computer‘s central processing unit to mine coins, while GPU mining taps into the power of a graphics processing unit for vastly faster hashrates. However, coins designated as GPU mineable can still be mined on CPU but far less profitably.

Due to their weaker performance, CPUs are generally not recommended for mining cryptocurrencies unless just experimenting.

Choosing Between Mining Pools vs Solo

  • With solo mining, you work alone to try winning entire block rewards but risk unreliable and inconsistent payouts.
  • Mining pools combine smaller miners into teams where you earn smaller shares of each reward based on your contribution. This smooths out payments.

Pools are generally recommended over solo mining unless you have a large mining operation. Solo mining‘s probability of earning any reward before pools solve blocks first is extremely low for small scale miners.

Software Setup and Configuration

Mining software suites like CGMiner, EasyMiner, and BFGMiner help you monitor hardware, overclock components for higher hash rates, connect to pools, and manage your crypto wallets.

Proper configuration is critical not just for your payouts but also safely operating equipment at optimal temperatures to prevent crashes and hardware degradation.

Mining Pools

Joining a mining pool allows you to combine your hashing power with other miners across the world to find blocks faster. The pool operator charges a small percentage fee from your earnings for providing the pool mining service.

How Mining Pools Work

  1. You configure your mining software to connect to the pool.
  2. Your contributions are tracked as shares submitted to earn you fractional crypto rewards relative to your share of the work.
  3. Rewards are automatically sent to your wallet by the pool operator when certain thresholds are met.

Major Pools to Consider

The largest global mining pools across key cryptocurrencies include AntPool, F2Pool, Ethermine, SparkPool, and ViaBTC.

When selecting a pool, key factors to compare are size, fees, minimum payouts, reward types offered, ease of setup and use, transparency, and customer reputation.

Mining Pool Payment Structures

Pools may pay using different reward distribution models:

  • PPS – Pay Per Share offers instant payouts for submitted shares
  • PPLNS – Pay Per Last N Shares rewards miners based on time connected to the pool
  • PPS+ – Blends PPS and PPLNS for balanced miner loyalty

Be sure to understand how the pool calculates payments since it impacts expected returns.

Cloud Mining Overview

Cloud mining enables mining cryptocurrency without managing physical hardware. A cloud provider sets up and hosts the miners, taking care of configuration and maintenance. You pay for hashrate to direct to mining pools, then receive payouts after the provider takes service fees off the top.


  • Avoid equipment costs
  • Setup takes minutes
  • Provider handles upkeep/issues
  • Scale hashrate up or down


  • Opaque provider practices
  • Account suspension clauses
  • Contracts lock you in
  • Higher fees than self-mining

Reputable firms like Genesis Mining and MinerGate offer cloud services. But lengthy contracts and poor transparency at some providers should be evaluated closely before signing up.

Cryptocurrency Mining Profitability

With the right mining strategy, cryptocurrency mining can still be profitable, but there are a lot of factors in the equation. Let‘s break down what impacts returns:

Hardware and Electricity Costs

Ongoing expenses for equipment, maintenance, repairs, electricity bills, and more subtract from your bottom line. Efficiency of mining devices along with electricity rates have a major influence here.

Cryptocurrency Price Volatility

Since mining earnings are paid out in crypto, market swings have an enormous impact. Consider current prices versus future projections when estimating profitability.

Increasing Difficulty and Competition

As more miners contribute hashpower to networks, difficulty increases to compensate. This slowly decreases block rewards in already mature coins. New miners constantly change the economics.

Return on Investment Timeframes

Miners with lower costs and greater scale through advantages like cheaper electricity can achieve ROI faster on equipment. Be realistic about likely breakeven timeframes for home mining operations.

With so many variables at play, use profitability calculators and adjust assumptions to plan your mining project conservatively.

Troubleshooting Common Mining Issues

Running into problems is a rite of passage when learning to mine. Here are some typical challenges and their solutions:

Software crashes – Close and reinitialize the program. Double check config file settings if crashes persist.

Overheating hardware – Improve ventilation or lower overclock settings. Thermal throttling can severely reduce hashrate.

Network connectivity losses – Switch mining pool or check ISP for issues if disconnected often.

Incorrect wallet address – Double check receiving address input if expected payments don‘t arrive.

Stale shares – Tuning GPUs to lower intensity/temperature can help if too many shares are rejected.

Incorrect drivers or software – Fully uninstall and reinstall latest GPU drivers and mining programs if performance degrades over time.

Don‘t hesitate to ask the mining community like Reddit or Discord when you run into trouble. Nine times out of ten, someone else has solved that exact problem and written about it.

The Future of Cryptocurrency Mining

Looking ahead, here are two key trends set to shape crypto mining:

Difficulty and Hashrate Increasing

As more powerful mining gear comes online and professional operations expand, mining difficulty will continue climbing. This reduces block rewards which hurts home hobbyist profitability. Staying ahead of the curve with equipment is key.

The Shift Toward Proof of Stake

PoS protocols allow token holders rather than miners to validate blocks. Ethereum is transitioning to PoS which alters economics. However, major coins like Bitcoin will still rely on miners and PoW. Even if rewards decline over time, mining will remain integral to functioning networks.

Glossary of Key Cryptocurrency Mining Terms

Hashrate – Measurement of a miner‘s mining power or work done per second

Block reward – Coins paid to a miner for successfully adding a block

Mining difficulty – Metric showing how competitive mining is on a network

Proof of work (PoW) – Consensus used by Bitcoin and others where miners compete to solve math problems

Proof of stake (PoS) – Consensus model where token holders vote to add blocks rather than miners

ASIC miner – Application-specific integrated circuit designed specifically for mining cryptocurrency

Mining pool – Groups of miners that work together and share block rewards


That covers everything needed to fully understand the cryptocurrency mining process from start to finish as a beginner. The key considerations are choosing a coin to maximize profitability, getting the right hardware and software configured properly, joining a mining pool, and keeping electricity and operational costs low.

While mining can be highly technical, don‘t let complexity deter you. With the right strategic decisions for your situation and budget, it‘s still possible for everyday people to participate in securing blockchain networks while earning crypto. Just be sure to crunch the numbers conservatively and have reasonable expectations before investing substantial sums into mining.