shutterstock_751412365-250x200-250x200

Bitcoin mining: Can I make money doing it?

Mining bitcoin is an intriguing hobby — but is it possible today to make money doing it?

With the value of bitcoin soaring to new heights — nearly $1,200 in March 2017 — you may be tempted to invest in the equipment necessary to begin “mining” for it. But while bitcoin mining echoes the Gold Rush of 1849, it may take a bit more than simply showing up, pan in hand.

Learn more Compare mining providers

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

Compare bitcoin cloud mining providers

Name Product Payment Methods Payment Currencies Mineable Coins
Hashflare Cloud Mining
Hashflare Cloud Mining
Credit card (VISA/Mastercard), Wire transfer
USD, EUR
BTC, DASH, ETH, LTC, XMR, ZEC
Genesis Mining
Genesis Mining
Credit card (VISA/Mastercard), Cryptocurrency
USD, BTC, LTC, DOGE, DASH
BTC, DASH, ETH, LTC, XMR, ZEC

Compare up to 4 providers

What does it mean to mine bitcoin?

Mining bitcoin is how this cryptocurrency is released to the world. For you to mine bitcoin, you must attempt to complete a “block” containing recent bitcoin transactions. These transactions are recorded in a digital ledger called blockchain. Once a block is complete, a specified amount of bitcoin is given as a reward.

Blocks in a blockchain

The entire history of bitcoin transactions is recorded in a digital ledger called the blockchain. Because the blockchain is public, anyone can access it. Data is stored across a network, so it’s not susceptible to exploitation by hackers or central failure.

Each record or series of records on the blockchain is known as a block. A block is sent to the network and added to the blockchain after it’s accepted by the network as a valid transfer.

A block reward

Bitcoin miners across the globe race to solve a computational puzzle — called a “hash” — that will add the next block to the blockchain. Once the block is validated, a miner is issued a “block reward.”

A block reward is an amount of bitcoin given to the person who adds a new block to the blockchain. This amount is cut in half every time 210,000 blocks are solved. In 2009, the block reward began at 50 bitcoin per block. That value was halved to 25 in 2013 and will likely be reduced again in 2017.

What is cryptocurrency?

Cryptocurrency is a digital currency for which encryption techniques are used to regulate its use and generate its release. Unlike fiat currency — like US dollars, euros and yen — cryptocurrency is not regulated or controlled by any government or agency.

Where do I store my mined bitcoin?

Once miners receive bitcoin, they are given a digital key to the bitcoin addresses. You can use this digital key to access and validate or approve transactions.

You can keep these digital keys safe with a number of wallet options:

  • Desktop wallets. Software like Bitcoin Core allows you to send and store bitcoin addresses and also connects to the network to track transactions.
  • Online wallets. Bitcoin keys are stored online by exchange platforms like Coinbase or Circle and can be accessed from anywhere.
  • Mobile wallets. Apps like Blockchain store and encrypt your bitcoin keys so that you can make payments using your mobile device.
  • Paper wallets. Some websites offer paper wallet services, generating a piece of paper with two QR codes on it. One code is the public address at which you receive bitcoin and the other is your private address you can use for spending.
  • Hardware wallets. You can use a USB devices created specifically to store bitcoin electronically and your private address keys.

Compare Bitcoin marketplaces

Rates last updated November 15th, 2019
Details Features
Coinbase Digital Currency Exchange
Coinbase Digital Currency Exchange
Buy and sell bitcoin, Ethereum, Bitcoin Cash and Litecoin on one of the world's most renowned cryptocurrency exchanges.
  • Fees: Varies by transaction
  • Supported countries: 32 countries
  • Payment methods: Bank transfer, Credit/debit card, wire
Go to site
LocalBitcoins P2P Exchange
LocalBitcoins P2P Exchange
Trade fiat currency for bitcoin in person or online with this peer-to-peer exchange offering competitive fees and wide delivery options.
  • Fees: 1% commission for each completed operation
  • Supported countries: Exchangers in 248 countries
  • Payment methods: PayPal, Credit/Debit and more
Go to site
BitQuick P2P Bitcoin Marketplace
BitQuick P2P Bitcoin Marketplace
Buy and sell bitcoin fast through a cash deposit at your local bank branch or credit union, or via a money transfer service.
  • Fees: 2% to buy, 0% to sell
  • Supported cryptos: BTC
  • Funding methods: Cash – USD
Go to site More info
Binance Cryptocurrency Exchange
Binance Cryptocurrency Exchange
Trade 60+ cryptocurrency pairs on this up-and-coming exchange based in China. Multi-language support.
  • Fees: 0.1% trading fee
  • Supported countries: Worldwide
  • Deposit methods: BTC, ETH, LTC, NEO & BNB
Go to site
Paxful Bitcoin Marketplace
Paxful Bitcoin Marketplace
Connect with bitcoin buyers and sellers through this peer-to-peer marketplace that accepts cash, credit and more than 300 other payment methods.
  • Fees: Varies by transaction, and PayPal no fees
  • Supported countries: Worldwide
  • Payment methods: Western Union, PayPal and many more
Go to site
Changelly Crypto-to-Crypto Exchange
Changelly Crypto-to-Crypto Exchange
Access competitive crypto-to-crypto exchange rates for more than 35 cryptocurrencies on this global exchange.
  • Fees: 0.5% + networking fees
  • Supported countries: Worldwide
  • Payment methods: USD, EUR, 35+ cryptos
Go to site
Indacoin Cryptocurrency Exchange
Indacoin Cryptocurrency Exchange
Use your credit or debit card to buy bitcoin and other cryptocurrency without having to verify your identity.
  • Fees: Varies by transaction
  • Supported countries: More than 100 countries
  • Payment methods: Payza, Credit/Debit cards (USD) and more
Go to site
Cancoin P2P Crypto Exchange
Cancoin P2P Crypto Exchange
Buy and sell bitcoin with privacy on this multi-signature, peer-to-peer exchange that supports a wide range of payment options.
  • Fees: 1% + miner's fee (sellers only)
  • Supported countries: USA & Canada
  • Payment methods: Cash, PayPal, Western Union & more
Go to site
Bitit Bitcoin Marketplace
Bitit Bitcoin Marketplace
Buy bitcoin with cash or credit card and get express delivery in as little as 10 minutes.
  • Fees: Card: 8.9%, Cash: 11.9%
  • Supported countries: 50+ countries
  • Deposit methods: Credit card, cash vouchers, Epay
Go to site
Coinmama Bitcoin Marketplace
Coinmama Bitcoin Marketplace
Use USD/EUR to buy bitcoin and Ether with credit card or cash on the Coinmama cryptocurrency exchange.
  • Fees: 5.5% + 5% for credit card
  • Supported countries: 226 countries worldwide
  • Payment methods: Credit/debit card, cash
Go to site
VirWox Virtual Currency Exchange
VirWox Virtual Currency Exchange
Buy bitcoin through PayPal on one of the oldest virtual currency exchanges in the business.
  • Fees: Varies by transaction
  • Supported countries: Worldwide
  • Payment methods: PayPal, Skrill, paysafecard, uKash
Go to site
xCoins P2P Bitcoin Lending
xCoins P2P Bitcoin Lending
Buy bitcoin instantly with credit card, PayPal or bank account on this peer-to-peer lending platform.
  • Fees: Varies by transaction
  • Supported countries: 40+ countries
  • Payment methods: Credit card, PayPal, bank transfer
Go to site
Cryptex24 Exchange
Cryptex24 Exchange
Buy and sell crypto and other digital currencies on this global fixed-rate exchange.
  • Fees: Varies by transaction
  • Supported countries: Worldwide
  • Payment methods: Western Union, MoneyGram, Perfect Money & more
Go to site

Are people still making money mining bitcoin?

Yes, people are making money mining bitcoin. However, times have changed.

With the value of 1 bitcoin rising to nearly $1,200 in 2017, a block reward of 25 bitcoin is a lot of money. When mining first began, there was less competition, and to complete a block required a lot less power. Mining could be done using CPUs found on standard desktop computers.

Making money mining bitcoin is much more difficult today. Some of the issues contributing to this difficult include:

  • Hardware prices. The days of mining using a standard CPU or graphic card are gone. As more people have begun mining, the difficulty of solving the puzzles has too increased. ASIC microchips were developed to process the computations faster and have become necessary to succeed at mining today. These chips can cost $3,000 or more and are guaranteed to further increase in cost with each improvement and update.
  • Rise in corporate miners. Hobby miners must now compete with for-profits — and their bigger, better machines — when mining to make a buck.
  • Power costs. Power in the United States is more expensive than it is in other parts of the world, making it further difficult to compete with big-miner money.
  • Puzzle difficulty. Bitcoin’s protocol adjusts the computational difficulty of the puzzles to finish a block every 2,016 blocks. The more computational power put toward mining, the more difficult the puzzle.

Making money by joining a mining pool

If you’re looking to make money mining bitcoin, you could consider joining a mining pool. These collectives pool the resources of its members and then divide the block reward according to shares. The pool gives these shares to members who can prove how their mining equipment contributed to completing the block. Current mining pools include SlushPool, P2Pool and BitMinter.

How do I get started mining bitcoin?

Bitcoin mining can be done for money or for the sheer thrill of it. Before you get started, you’ll need to invest in a few mining tools.

Mining toolsDescription
Mining hardware.You’ll need a custom bitcoin ASIC chip for your computer. Prices for ASICs range from $400 to $3,000. To avoid a skyrocketing electric bill, look for quality equipment.
Mining software.Download free software like CGMiner or EasyMiner. Easy-to-follow instructions explain how these programs work with your ASIC.
Get a bitcoin wallet.If you do complete a block, you’ll need to store your bitcoin in a wallet.
Current bitcoin news.Prices for bitcoin have fluctuated greatly over the past few years. Read up regularly to know the best times to buy or sell your bitcoin.

Can I mine other cryptocurrency?

Bitcoin is the better-known and most valuable cryptocurrency out there, but there are many others to explore — more than 700 at the time of this writing. These include Litecoin, Peercoin, Dogecoin, Monero and Ripple.

A simple Google search will reveal how you can get started with mining for other cryptocurrencies.

Bottom Line

The rising costs of mining effectively and competing against large mining pools have made it harder for the hobbyist to profit on mining bitcoin.

You will not likely mine enough bitcoin to recoup your initial investment in equipment and electricity. But if you’re not so concerned about making a buck, you could have fun panning for this cool currency.

Rates last updated November 15th, 2019
Details Features
Trezor Bitcoin Wallet
Trezor Bitcoin Wallet
Trezor hardware wallet is a secure way to keep your cryptocurrency safe from hackers and malware.
  • Features: OLED display, cross-platform support
  • Multi-currency support: BTC, DASH, LTC & more
  • Security: PIN, 2-factor authentication
Go to site More info

Frequently asked questions

Was this content helpful to you? No  Yes

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy Policy and Terms.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site