How to start mining

How to start mining is a question on the minds of many beginners in the crypto industry. As of 2024, cryptocurrency mining remains a profitable activity.

However, for a smooth start, it is essential to conduct a detailed analysis and precise calculations. The future miner should take into account the total equipment costs, possible fluctuations in cryptocurrency prices, and potential changes to protocols.

In this article, we will explain how to get started with mining, cover the main types of mining, discuss the potential profits, required equipment, and software. We will also compare mining to crypto trading, discuss safe storage of mined coins, and explain how to exchange new cryptocurrency units for fiat money accurately.

What is cryptocurrency mining?

Cryptocurrency mining is the process of verifying cryptocurrency transactions and subsequently adding them to the blockchain.

When a cryptocurrency transaction is received by miners, they begin calculating a hash (a unique key) for the block where the transaction is recorded.

As soon as the hardware finds an appropriate key, it is sent to other network nodes for confirmation. As a reward for completing these tasks, miners receive new units of cryptocurrency (which is why the process is often called “mining” of new coins) as well as any transaction fees included in the block.

This is the basic operating principle of mining. Miners prioritize those transactions with higher fees. So, if you want to speed up your transaction, set a higher fee. If the fee is below average, confirmation may take longer.

This complex activity is crucial for maintaining the performance of the entire cryptocurrency system, and even ensures the security of transactions.

Thanks to miners, the crypto network is protected from fraud and all attempts at blockchain manipulation, helping to preserve the decentralization of the system—that is, the absence of a unified governing or regulatory center.

Without exaggeration, without the mining process, cryptocurrencies simply could not exist.

The main goal of any miner is to be the first to complete the task and finally receive the much-anticipated reward.

The high complexity of mining encourages miners to join together in groups to solve tasks more efficiently.

Real prospects of mining

Before exploring how to start mining, it is important to address a timely and relevant question: Is there any real sense in continuing to engage in mining?

The most interesting aspect is that there is no definitive answer to this question, since mining profitability depends on a wide range of factors.

Here are some of them:

• The current price of the chosen cryptocurrency and its potential fluctuations
• The mining difficulty for this cryptocurrency
• Electricity costs required for mining equipment operation
• The cost of mining hardware
• The potential for reducing mining expenses
• The ability to reconfigure equipment for mining other cryptocurrencies

Competition among miners is constantly increasing, leading to higher volumes of required investments to remain profitable. For this reason, you cannot rely on experience.

For example, today the cost of hardware alone is significantly higher than it was ten years ago. As a result, the payback period for your investment in equipment is now much longer.

Key requirements for new miners

Before discussing how to start mining, it is important to reiterate that this process requires not only certain knowledge, but also significant investment—especially in recent years.

Before you can start mining, you will need to acquire the following:

• A cryptocurrency wallet to store your mined coins
• Mining hardware suited to your needs
• Specialized mining software
• A stable internet connection
• An economical and reliable electricity source

If you are more interested in cloud mining, it is important to choose only a reputable company before getting started. You will need to register on their platform and then purchase a suitable mining contract.

Best equipment for mining

Today, there are two main types of equipment for effective mining: ASICs and GPUs.

ASICs (Application-Specific Integrated Circuits) are designed to perform specific tasks. Unlike general-purpose chips, ASICs are engineered for narrowly focused applications, which makes them ideal for mining due to their high performance and energy efficiency.

These devices are tailored for particular algorithms, allowing them to significantly outperform other types of mining hardware.

Currently, the best ASIC models include:

• Hummer Miner Mars H1 (used for the Handshake algorithm)
• Bitmain Antminer Z15 (used for the Equihash algorithm)
• Todek Toddminer C1 Pro (used for the Eaglesong algorithm)
• Innosilicon A10 ETH Master 500Mh (suitable for the Ethash algorithm)

As for GPUs, mining with these means using graphics processors (video cards) to provide the computational power necessary for mining cryptocurrencies.

This typically involves placing several powerful GPUs in a personal computer or a dedicated mining rig. Since ASICs have become highly popular, GPU mining remains relevant mainly for cryptocurrencies whose algorithms are resistant to ASIC devices.

The most profitable graphics cards today are:

• Nvidia GeForce RTX 4090 — currently the most expensive and powerful desktop graphics card for home use on the market
• AMD Radeon RX 7900XTX — currently the most powerful graphics card from AMD

An ideal mining computer must have:

• A powerful power supply (at least 4 GB of RAM)
• A hard drive of at least 100 GB (important for installing the operating system)
• Quality mining software

The motherboard should support a minimum of four PCI-E slots to accommodate multiple GPUs.

Mining software

How do you start mining? After you have selected your mining hardware, it is time to think about software.

Many experts recommend Windows, as this operating system is easy to set up, offers stable operation for mining farms, and makes it easier to exchange mined cryptocurrency.

Most often, the 64-bit version of Windows with a minimal number of installed applications is preferred, as this is important for improving performance.

Windows 7 is considered the fastest version due to its minimal number of built-in add-ons.

However, if you plan to use a rig with 12 AMD graphics cards, Windows 10 is your only option, as only this OS will support such hardware configurations correctly.

If you are using both AMD and Nvidia cards at the same time, the optimal choice is Windows 10 LTSB.

As for mining software, here are some popular options:

Mining vs cryptocurrency trading – what is the difference?

Mining and cryptocurrency trading are two key ways to generate income in the world of digital assets.

Each of these methods has its own advantages and disadvantages. All features should be taken into account, especially if you are still uncertain about which approach suits you best—mining or buying and selling cryptocurrencies.

Ultimately, the choice between mining and trading cryptocurrencies depends on your level of knowledge, skills, the amount of free time, and financial resources you are willing to invest. Your personal preferences also play a significant role.

How to start mining

How do you start mining? Preparation should be long and thorough. Attention to detail will work to your advantage here.

1. First, define your goal.

Mining should not be seen as a primary source of income at the beginning. Yes, over time, it can bring a good profit, but in the early stages, it is better to treat mining as a secondary source of income.

If you are ready to invest several thousand or—ideally—tens of thousands of dollars and wait for your equipment to pay off over the course of a year or a year and a half, then you may consider investing heavily in equipment.

On the other hand, if your goal is to earn a quick profit of 10–20% of your initial investment with minimal risk, then simply buying a popular cryptocurrency during a dip can be a better choice.

Given the volatility of the market, this method may yield profits faster than mining, but it also carries its own risks.

2. Decide where to set up your equipment.

If you have decided to get serious about mining, you need to plan your equipment purchase and placement. GPU mining rigs require good conditions: well-ventilated and clean rooms, preferably with extra cooling and soundproofing if at home.

ASIC devices are less demanding but do not neglect the setup, as repairs can be costly.

Rigs with 10–20 GPUs or 2–3 ASICs will cost you about $10,000 and can be placed on a balcony, in an attic, or in a storage room.

If your investment exceeds this, it is better to prepare a dedicated room with proper equipment and infrastructure.

3. Choose between ASICs and GPUs.

This is one of the most debated topics. Your choice depends on many factors: the prospects of your chosen cryptocurrency, mining difficulty, your technical expertise, readiness to monitor the market, service availability, and warranties.

If you want minimal involvement—just set up and let it run—ASICs are a great option.

If you are interested in active management and monitoring, GPUs are your ideal choice.

Ultimately, it comes down to your technical level and how much time you are willing to dedicate to mining. To estimate potential profits, services like WhatToMine can be useful.

4. Decide where to buy equipment.

Buying GPUs is relatively simple—they are available in most computer stores. You can find both individual components and assembly, setup, and maintenance services for mining rigs. Occasionally, there may be shortages of certain GPU models, but that can be managed.

ASICs are more complicated. For example, in CIS countries, ASICs are not sold officially, which means there is no official warranty. At best, you can get a six-month warranty from a major supplier, which is important considering that equipment payback might take longer.

If you buy ASICs from stock, be prepared to pay 2–3 times the original price.

Another option is to buy directly from the manufacturer, but in that case, you’ll have to deal with shipping from China.

5. Choose your mining software.

So you have your equipment, what’s next? For GPU rigs, you will need to install the appropriate software.

If you assembled your rig yourself and did not get advice from your supplier, it’s worth visiting specialized forums, such as MiningClub or Bitcointalk.

Choose software based on your GPUs and the coin you plan to mine. To maximize efficiency, consider fine-tuning utilities such as MSI Afterburner.

It is also recommended to set up a watchdog (software or hardware) for automatic restarts in the event of failures.

For ASICs, things are simpler: all you need to do is enter your pool settings, and you are ready to go. Choose a pool that suits your coin, or use a multipool if you want the system to automatically select the most profitable coins.

Now you know how to start mining. Next, let’s discuss different mining methods, each requiring a different level of investment and effort.

Solo mining

Solo mining means that a single person mines cryptocurrency independently. In the past, it was possible to do this even with a regular home computer, but those days are long gone. Today, given the increased complexity of mining and high competition, successful solo mining requires enormous financial investment. This situation actually led to the creation of mining pools.

The main advantage of solo mining is that there is no need to pay pool fees or buy cloud mining contracts.

The drawback is that without significant investment in equipment, your chances of earning a reward become minimal.

With solo mining, all the equipment is owned and controlled by you.

Mining pools

A mining pool is a server that divides the task of computing a block into many smaller tasks and distributes them to connected devices.

By combining the efforts of multiple miners, a pool significantly increases the chances of earning a reward and greatly reduces the influence of luck. When pool members collectively find a block, the reward is shared among them according to established rules.

Today, there are many mining pools. Some are dedicated to a specific cryptocurrency, while others offer the ability to choose between different coins.

When choosing a pool, you should pay attention to its size, hashrate, cooperation conditions (for example, the fee rate and minimum payout threshold), and, of course, its reputation.

Once you select a pool, you need to configure your hardware and software to connect to it, after which you can start mining.

Mining pools have several advantages:

• Regular and predictable payouts
• The equipment remains in your possession
• Technical knowledge is needed to set up the hardware
• The equipment may generate noise and significant heat

There is one main disadvantage: substantial investment in equipment is required.

Cloud mining

Cloud mining is the process of mining cryptocurrency using remote equipment rented from a specialized company.

These companies themselves purchase, install, and maintain the equipment, and then offer users access to their computing power.

To participate in cloud mining, you need to purchase a contract for a certain amount of computing resources. All mined cryptocurrency is credited to the user’s wallet according to the terms of the contract.

While this mining method has several significant advantages over traditional approaches, it is not without risks. The main drawback is the possibility of encountering scammers, so it is extremely important to carefully choose a reliable service provider.

There is also an opportunity to earn from cloud mining without any investment. Some companies offer free hash rate to registered users, which gives you the chance to explore the cryptocurrency market without financial costs.

Pros:

• Regular and predictable payments;
• Low entry threshold—can start with a small investment;
• No special technical knowledge required;
• No need to maintain equipment.

Cons:

• The equipment does not belong you;
• High risk of encountering scammers.

Where to store your mined coins

There are several ways to store cryptocurrency. You can create a software wallet on your computer or mobile device by installing the relevant application.

Another option is to purchase a hardware wallet, such as a Ledger or Trezor.

You can also register with a cryptocurrency exchange and get a wallet there.

Each of these methods has its own advantages and disadvantages. If you are looking for a secure solution for long-term storage without frequent buy and sell operations, it is best to choose a hardware wallet.

If you do not want to spend money on a device, you can download the official wallet for your chosen cryptocurrency from its website and install it on your personal computer.

If you value quick and frequent trading operations, a wallet on an exchange would be the most suitable option. Ultimately, it all depends on your needs and preferences.

How to exchange cryptocurrency for cash?

Many large cryptocurrency exchanges provide the option to exchange digital assets for fiat currencies (USD, EUR, RUB) and withdraw them to your bank account or VISA/MasterCard.

However, be prepared to undergo identity verification; otherwise, you may face withdrawal limits or be unable to transfer fiat at all. Due to high demand, verification on exchanges can take anywhere from 1 to 3 months.

Once you have chosen a crypto exchange, review the withdrawal terms and conditions on the platform.

Alternatively, you can use exchangers, which allow for an even simpler withdrawal process than through exchanges, but often with a less favorable rate and a higher risk of encountering scammers.

Conclusion

Cryptocurrency mining is one of the key processes in the crypto industry. It is a way to generate new blocks in a blockchain that involves solving complex mathematical problems required to find the right hash.

When a miner finds the solution, it is quickly verified, and whoever completes the calculations first receives their reward from the blockchain network. Thus, the miner’s primary goal is to be the first and claim the reward.

Over time, the rising difficulty of mining has led miners to join pools to increase the efficiency of the process.

Before you start mining, it is important to remember that this process requires not only technical knowledge but also significant financial investment.

If you are ready to invest several thousand, or even tens of thousands of dollars—and if you are prepared to wait a year or more for your equipment to pay off—then you can confidently invest in mining hardware.

However, if your goal is quick profit with minimal risk, it is better to choose another way to earn, such as buying cryptocurrency during price dips. If you want to realize profits quickly, this approach will be more advantageous.

Mining equipment requires special conditions. For example, graphics cards need a clean, well-ventilated room with additional cooling and sound insulation. Therefore, if you plan to install a mining rig in your home, ensure you have a designated space that meets these requirements.

The specific equipment you choose is one of the most crucial decisions to make before beginning mining. If you prefer minimal intervention in the process, ASIC devices are an excellent option. If you are interested in actively managing the process and monitoring its efficiency, then graphics cards may be a better fit for you.

There are several mining methods: solo mining, cloud mining, or working through pools. Whichever method you choose, remember that mining is not an effortless way to make money. It is a labor-intensive process and is especially challenging for beginners.

You will have to regularly monitor the performance of your equipment, follow the market, and keep track of industry news. Although crypto mining generally requires minimal intervention by miners, it is always important to be prepared to respond quickly to any emerging issues.