How Do You Mine Bitcoin: A Step-by-Step Guide to Getting Started

“Bitcoin mining” sounds too technical until you understand what’s actually happening. People hear “mining” and imagine something like digging for gold.

The reality is different. Miners run specialized computers that solve complex mathematical problems. These computers secure the Bitcoin network and process transactions, and in exchange, miners receive Bitcoin rewards.

Most Bitcoin enthusiasts have asked one of these questions to themselves at least once: “Can I mine from home? What equipment do I need? Is it actually profitable?” We cover everything you need to know about mining in this guide.

What Bitcoin Mining Actually Means

Bitcoin mining is not about physically digging anything. Miners run computers that process Bitcoin transactions and secure the network. In exchange for providing this computational work, miners receive Bitcoin rewards.

So behind the scenes, every time someone sends Bitcoin, that transaction needs to be verified and recorded on the blockchain. Thousands of transactions get bundled together into a “block.”

Miners compete to be the first to validate that block. For this, they need to solve a complex mathematical puzzle that requires guessing a specific number (called a nonce). When combined with the block’s data and run through a cryptographic function, this number must produce a result meeting Bitcoin’s difficulty target.

Finding the right number requires trillions of random guesses. The first miner to find the correct answer:

• Broadcasts it to the network
• Adds the block to the blockchain
• Receives the block reward

Currently, that reward is 3.125 Bitcoin per block (worth roughly $210,000 at $67,000 per Bitcoin), plus any transaction fees included in the block. This reward halves every four years to control how fast new Bitcoin enters circulation.

The “mining” metaphor comes from Bitcoin’s limited supply, similar to gold’s finite supply. As more Bitcoin gets mined, the remaining amount becomes scarcer and progressively harder to get.

Why Bitcoin Needs Miners and What They Do

Bitcoin operates without banks or centralized authorities. This creates a fundamental problem: who prevents fraud?

When you swipe your debit card, your bank performs several checks:

• Verifies you have sufficient funds
• Confirms the transaction is legitimate
• Processes the payment
• Updates account balances

Bitcoin has no bank performing these roles, so the miners fill this gap.

What miners verify:

Miners check that every Bitcoin transaction is legitimate. They do the following:

• Verifying the sender actually owns the Bitcoin they’re trying to spend
• Confirming those coins haven’t already been spent elsewhere (preventing double-spending)
• Packaging legitimate transactions into blocks, solving the cryptographic puzzle to validate the block, and broadcasting it to the network

Why this makes Bitcoin secure:

This process (called Proof-of-Work) makes attacking Bitcoin prohibitively expensive. To successfully double-spend Bitcoin or rewrite transaction history, an attacker would need to control more computing power than all honest miners combined.

Currently, that means outcompeting hundreds of exahashes per second of computational power. These machines draw hundreds of megawatts of electricity. So the cost of mounting such an attack would run into hundreds of millions of dollars.

The economic incentive structure:

Miners invest heavily in hardware and electricity. They earn Bitcoin rewards only by following the rules and mining valid blocks. Attempting to cheat would cost enormous resources and likely fail. This makes honest mining more profitable than attacking the network.

Without miners, Bitcoin would be vulnerable to attacks. With thousands of miners competing globally, Bitcoin has become one of the most secure financial networks ever created. No single entity controls it. No government can shut it down. Transactions are processed 24/7 regardless of banks’ hours or holidays.

Equipment Required to Mine Bitcoin

Mining Bitcoin requires specialized hardware called ASICs (Application-Specific Integrated Circuits). These machines are built for one purpose: computing SHA-256 hashes as fast as possible to solve Bitcoin’s cryptographic puzzles.

Regular computers don’t work for Bitcoin mining anymore. Even high-end gaming PCs with powerful graphics cards can’t compete. Bitcoin’s network difficulty has increased so dramatically that only purpose-built ASIC miners have any chance of profitability.

Current generation ASIC miners:

Antminer S21 (2024 model)

• Hashrate: 200 TH/s (200 trillion hashes per second)
• Power consumption: 3,500 watts
• Cost: $3,000-$5,000
• Manufacturer: Bitmain

Whatsminer M60S (2024 model)

• Hashrate: 172 TH/s
• Power consumption: 3,422 watts
• Cost: $2,800-$4,500
• Manufacturer: MicroBT

Antminer S19 XP (2022 model, still competitive)

• Hashrate: 140 TH/s
• Power consumption: 3,010 watts
• Cost: $2,000-$3,000
• Manufacturer: Bitmain

What you need beyond the ASIC:

These machines generate significant heat and noise, and they’re loud enough that you wouldn’t want them running in your living space. Setting up a mining operation requires:

• Power supplies (often sold separately from the ASIC itself)
• Ethernet cables for stable network connectivity
• Cooling solutions like industrial fans or air conditioning
• Electrical infrastructure capable of delivering 220-240V power with sufficient amperage
• Monitoring software to track performance and catch issues
• Safety equipment, such as fire suppression systems for larger operations
• Noise reduction setups, depending on your location and neighbors

Professional mining facilities resemble data centers more than anything you’d find in a home.

Equipment	Cost Range	Power Draw	Hashrate	Notes
Antminer S21	$3,000-$5,000	3,500W	200 TH/s	Latest generation, most efficient
Whatsminer M60S	$2,800-$4,500	3,422W	172 TH/s	Competitive alternative
Antminer S19 XP	$2,000-$3,000	3,010W	140 TH/s	Still profitable in low-cost electricity areas
Power Supply	$150-$300	N/A	N/A	Often sold separately
Cooling/Ventilation	$100-$1,000+	Varies	N/A	Depends on scale and climate
Electrical Work	$500-$2,000+	N/A	N/A	May need electrician for proper wiring

What are the Real Costs of Bitcoin Mining?

The hardware cost is just the beginning. Electricity dominates mining profitability calculations because ASICs run 24/7 and consume thousands of watts continuously.

Electricity cost calculation example:

An Antminer S21 consumes 3,500 watts (3.5 kW), so running 24 hours uses 84 kWh per day. At different electricity rates:

• $0.05/kWh: $4.20 per day ($126/month)
• $0.10/kWh: $8.40 per day ($252/month)
• $0.15/kWh: $12.60 per day ($378/month)

An Antminer S21 at 200 TH/s currently mines approximately 0.00004 BTC per day in a mining pool (assuming pool fees and network difficulty). At $67,000 per Bitcoin, that’s roughly $2.68 per day in Bitcoin revenue.

Compare revenue to costs:

• At $0.05/kWh: $2.68 revenue – $4.20 electricity = -$1.52 daily loss
• At $0.10/kWh: $2.68 revenue – $8.40 electricity = -$5.72 daily loss
• At $0.15/kWh: $2.68 revenue – $12.60 electricity = -$9.92 daily loss

These numbers consider only the current Bitcoin prices and network difficulty. Both fluctuate constantly and change profitability. When Bitcoin dropped from $126,000 in October 2025 to its current levels around $67,000, mining revenue was cut nearly in half while electricity costs stayed constant.

Additional costs often ignored:

• Hardware depreciation: ASICs become obsolete as newer, more efficient models launch. A $4,000 miner might be worth $1,000 after two years, as newer hardware makes it uncompetitive.
• Maintenance and repairs: ASICs fail. Fans burn out, hashboards die, power supplies need replacing. Budget 10-15% of hardware costs annually for maintenance.
• Cooling costs: In hot climates, air conditioning costs can equal or exceed the ASIC’s power consumption. A 3,500W ASIC might require another 2,000W of cooling in summer.
• Internet and infrastructure: Mining requires a stable internet with sufficient bandwidth. So you need proper electrical infrastructure, which may require expensive upgrades.
• Pool fees: Mining pools typically charge 1-3% of earnings, which reduces net revenue further.
• Downtime Equipment failures, internet outages, and maintenance costs add up when you’re earning nothing but still own depreciating equipment.

Why large operations dominate in mining:

The math shows why mining has become industrialized. Large operations achieve profitability because they can:

• Negotiate electricity rates below $0.03/kWh
• Buy hardware directly from manufacturers at volume discounts
• Operate in climates requiring minimal cooling
• Maintain economies of scale that reduce per-unit costs

For most people, buying Bitcoin with bank account directly through platforms like Paybis makes more financial sense than attempting to mine it profitably.

Setting Up Your First Mining Rig: Step-by-Step Process

If you’ve decided to start your first mining rig despite the disadvantages, here’s how to actually set up a mining operation. We assume you’ve already purchased ASIC hardware and have access to electricity cheap enough to potentially be profitable.

Step 1: Prepare your physical space

ASICs generate tremendous heat and noise (80+ decibels, similar to a vacuum cleaner running constantly). You need a dedicated space with:

• Adequate ventilation or cooling
• Electrical outlets capable of handling 15-20 amps at 220-240V
• Internet connectivity (wired Ethernet strongly recommended)
• Tolerance for constant fan noise (do not underestimate this)

Basements, garages, or outbuildings are better than living spaces. Some miners even build dedicated sheds or use shipping containers modified for mining.

Step 2: Set up electrical infrastructure

ASICs draw significant power. A single Antminer S21 pulls about 15 amps at 240V, and most home circuits are 15-20 amps. This means one ASIC might max out an entire circuit. So you may need an electrician to install dedicated circuits and appropriate outlets.

Using extension cords or power strips is dangerous with these power levels. Each ASIC needs a dedicated line to a proper outlet or hardwired connection.

Step 3: Connect and power on the ASIC

Modern ASICs have simple connections: a power cord and ethernet cable.

• Connect the ASIC to your router via Ethernet
• Plug in power
• Turn it on

The ASIC will begin booting, which takes 2-5 minutes.

Step 4: Access the ASIC’s web interface

ASICs have built-in web interfaces for configuration. Find your ASIC’s IP address (usually through your router’s connected devices list or network scanning tools). Open a web browser and go to that IP address.

Default login credentials are typically admin/admin or root/root (check manufacturer documentation). Change these immediately for security.

Step 5: Configure mining pool settings

In the ASIC’s web interface, navigate to mining configuration. You’ll need to enter:

• Mining pool URL (like stratum+tcp://pool.example.com:3333)
• Your pool username or Bitcoin wallet address
• Worker name (to identify this specific ASIC)
• Pool password (often just “x” or “123”)

Most miners use pools rather than solo mining. Popular pools include Foundry USA, AntPool, F2Pool, and Slush Pool. Each pool has slightly different fee structures and payout methods.

Step 6: Start mining and check the performance

Save your configuration, and the ASIC will begin mining within minutes. Monitor the web interface for:

• Current hashrate (should match the ASIC’s specifications)
• Temperature (typically 60-80°C is normal)
• Error rate (should be under 1-2%)
• Accepted shares vs rejected shares

Most pools have dashboards showing your contributed hashrate, estimated earnings, and payout history. Check your pool dashboard to verify the ASIC is contributing work properly.

Step 7: Set up monitoring and maintenance

Mining requires active monitoring. A lot of things can go wrong: equipments fail, hash rates drop, and the temperatures spike. Set up alerts through your pool dashboard or third-party monitoring services that notify you of issues.

Plan for regular maintenance, like cleaning dust from fans and heatsinks every few months. Dust buildup reduces cooling efficiency and can cause overheating failures.

Mining Pools vs Solo Mining

Solo mining means your ASIC competes alone against the entire Bitcoin network to find blocks. Pool mining means joining thousands of other miners and sharing rewards proportionally based on contributed work.

Solo mining reality:

With an Antminer S21 at 200 TH/s, you’re competing against a network hashrate of roughly 600 exahashes per second (600,000,000 TH/s). Your single ASIC represents 0.00003% of the network’s total power.

Bitcoin finds a block roughly every 10 minutes (144 blocks daily). With 0.00003% of the network hashrate, you would statistically find a block once every 2,741 years.

You’d earn nothing for thousands of years, then potentially win 3.125 Bitcoin ($210,000) all at once. That’s not a viable business model for anyone except gamblers or people with massive mining farms containing thousands of ASICs.

Pool mining mechanics:

Mining pools aggregate hashrate from thousands of individual miners. When anyone in the pool finds a block, the reward gets distributed to all participants proportional to their contributed work.

Your 200 TH/s ASIC in a pool earning 10 blocks daily would receive approximately 0.00004 BTC per day (assuming pool fees around 2%). That’s about $2.68 daily at current prices, which is small but consistent and predictable.

How pools track your work:

Pools track contributed work through “shares,” partial solutions to the mining puzzle. Your ASIC submits shares to the pool constantly to prove it’s actively mining. When the pool finds a block, rewards are distributed based on how many shares each miner contributed.

Different pool payout structures:

• Pay Per Share (PPS): The pool pays you a fixed amount per share submitted, regardless of whether the pool finds blocks. Most predictable, but pool charges higher fees (3-4%) to cover variance risk.
• Pay Per Last N Shares (PPLNS): Rewards are distributed only when the pool finds blocks, split among recent share contributors. Lower fees (1-2%) but more variable day-to-day earnings.
• Full Pay Per Share (FPPS): Like PPS but includes transaction fee distribution, not just block rewards. Slightly higher payouts than regular PPS.

Consider these during the pool selection:

• Pool size matters: Larger pools find blocks more frequently and create smoother earnings, but smaller individual payouts. Smaller pools find blocks less frequently but you get larger chunks when they do.
• Fee structure: Range from 0-4%. Lower fees mean more profit but verify the pool is reliable and finds blocks at expected rates.
• Payout minimums: Most pools have minimum thresholds before sending payouts (often 0.001-0.005 BTC). Smaller miners may wait weeks between payouts depending on hashrate.
• Geographic location: Some pools have servers in specific regions. Lower latency to pool servers means fewer rejected shares and slightly better earnings.

Mining Method	Predictability	Required Hashrate	Payout Frequency	Best For
Solo Mining	None (lottery)	Petahashes+	Years between payouts	Large operations gambling on luck
Large Pool	Very predictable	Any amount	Daily	Most individual miners
Medium Pool	Moderate	Any amount	Multiple times daily	Balancing luck and consistency
Small Pool	Variable	Any amount	Days between payouts	Supporting decentralization

How to Calculate if Mining is Profitable

Mining profitability depends on five main variables: your hashrate, Bitcoin’s price, network difficulty, electricity cost, and hardware cost. All five fluctuate constantly, so this makes profitability a moving target.

Basic profitability calculation:

Daily Revenue = (Your Hashrate / Network Hashrate) × Daily Bitcoin Issuance × Bitcoin Price

Daily Cost = (Power Consumption in kW × 24 hours) × Electricity Rate

Daily Profit = Daily Revenue – Daily Cost

Let’s work through an example with current numbers:

Equipment: Antminer S21 (200 TH/s, 3,500W)
Bitcoin Price: $67,000
Network Hashrate: 600 EH/s
Electricity Cost: $0.08/kWh
Pool Fee: 2%

Daily revenue calculation:

• (200 TH/s / 600,000,000 TH/s) × 450 BTC × $67,000 = $4.01 gross
• After 2% pool fee: $3.93 net revenue

Daily electricity cost:

• (3.5 kW × 24 hours) × $0.08 = $6.72

Daily profit: $3.93 – $6.72 = -$2.79 loss per day

Over a month, you’d lose $83.70. Over a year, you’d lose $1,018 plus the original $4,000 hardware cost. This ASIC would never reach break-even at these parameters.

What would make it profitable?

To break even at $67,000 Bitcoin, you’d need:

• Electricity below $0.047/kWh, OR
• Bitcoin price above $114,000, OR
• Network difficulty dropping 40% (unlikely), OR
• Some combination of these factors

If you realize mining isn’t economically viable, Paybis offers straightforward ways to acquire Bitcoin without the complexity and ongoing costs of mining equipment. You can buy Bitcoin with a credit card, PayPal, or various other payment methods without worrying about electricity bills or hardware depreciation.

Cloud Mining and Hosted Mining Options

Cloud mining lets you rent hashrate from companies operating mining facilities. You avoid hardware ownership and electricity costs. Hosted mining involves buying your own hardware but paying a company to house and operate it in their facility.

Cloud mining mechanics:

You pay upfront for a contract providing specific hashrate (like 1 TH/s) for a defined period (often 1-3 years). The company operates physical miners on your behalf, and you receive proportional Bitcoin payouts minus electricity costs and fees.

Example cloud mining contract:

• 1 TH/s for 12 months
• Cost: $180 upfront
• Estimated daily revenue: 0.0000002 BTC ($0.0134 at $67,000)
• Electricity fee: $0.0042 per day
• Net daily profit: $0.0092

Over 12 months: $3.36 total profit on $180 investment (1.86% return). Compare this to simply buying Bitcoin directly through Paybis, where that same $180 would have given you direct Bitcoin exposure with complete liquidity.

Hosted mining mechanics:

You purchase physical ASICs (like buying an Antminer S21 for $4,000) but ship them to a hosting facility. The facility provides:

• Electricity
• Cooling
• Internet connectivity
• Maintenance

Monthly fees typically run $0.04-$0.08/kWh for power plus facility fees.

You own the hardware and receive all mining proceeds minus hosting costs. If Bitcoin prices or mining profitability improve, you can sell the hardware. With cloud mining, you own nothing physical.

Bottom Line

Bitcoin mining is not a bedroom hobby like it was in 2013. It now requires substantial capital and access to cheap electricity. The days of profitable home mining ended years ago for most locations.

For those serious about mining, several difficult requirements must be met:

• Relocate to low-electricity-cost regions
• Negotiate commercial electricity rates
• Achieve economies of scale through multiple machines
• Accept that mining is an expensive hobby rather than a profitable business

Most people lack these advantages.

The simpler alternative:

The alternative for most people who want Bitcoin exposure is simply buying it through platforms like Paybis. You avoid ongoing electricity costs, hardware maintenance, and the risk that your equipment becomes obsolete before reaching profitability. Use the Bitcoin calculator to see exactly how much Bitcoin you’ll receive for any amount you want to invest.