A Beginner Guide – How to Mine Cryptocurrency?

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Understanding cryptocurrencies is no longer a puzzle. Due to their global expansion, everyone knows about them and their basic infrastructure. In fact, according to recent data, more than 50 million people trade in crypto across the world. This figure is continuously increasing. And keeping our eyes on the level of interest people carry in crypto, we can estimate that this figure can increase significantly in the upcoming years. 

Cryptocurrencies are decentralized digital coins that anyone can buy, sell or trade using a crypto platform or crypto exchange. In some countries or regions, certain cryptocurrencies can be used even to buy or sell certain products or services. Some large companies and organizations across the world also started accepting crypto in return for their products and services.  

As you are here reading this post, we guess you might be a crypto trader or investor. You might have traded in crypto many times. You might have also earned lots of profit. But have you ever wondered how cryptocurrencies are generated and how they come into circulation? Do you have any idea about this? If not, this post can help you know how to mine cryptocurrency. 

What is Crypto Mining? 

As the name suggests, crypto mining is a process of generating new crypto coins. It is a very complex mathematical process that is done on a huge blockchain network of computers. To understand crypto mining in detail, we first need to understand what is “Blockchain” because crypto is mined on a blockchain network.


Blockchain is a distributed database technology. It involves a large number of blocks (digital ledger) that store a set of specific data or information. The blocks are linked to each other, forming an endless chain of blocks. 

The blocks included in the blockchain are actually digital ledgers. They act somewhat similar to ledgers that are used for recording the transactions of physical currencies. They get updated automatically when one block collects new information or updates the existing data. It is quite similar to debiting one account and crediting another in all ledgers. 

The blocks in blockchain can store information of any kind such as a record of crypto transactions, De-Fi smart contracts, etc. They have a limited storage capacity. When these blocks are filled, new blocks are created and added to the chain. However, the new blocks cannot be added to the chain randomly. Successful validation of transactions and verification of data stored in a block is a must to add a new block to the blockchain. 

Crypto Mining 

Technically, the process of successfully validating the transactions in a block, securing the network, and adding a new block to the chain is what crypto mining is. The miners who successfully validate the transactions stored in a block and secure the network get rewards in the form of new coins. The new coins can be circulated for transactions. 

How are Cryptocurrencies Mined? (Proof of Work)

Crypto mining is completely different from the mining of metals, like gold, silver, diamond, etc. While the mining of metal requires physical effort, crypto mining is done on a large network of computers without the need of even a human brain. However, we can still relate crypto mining to metal mining. Metals are mined, then circulated which increases the supply and value of that particular metal. In the same way, crypto is mined, then circulated which increases the supply and value of that particular coin. But, how cryptocurrencies are actually mined? What goes on in the background? Do you know about it? Well, we are here to explain it in detail to you. 

Crypto is not mined. It is rewarded to the miners in return for their good work. The miners need to solve the complex mathematical equations of various transactions in blocks to get new coins as rewards. The one who solves the equation very first gets a new block to add to the blockchain which means he gets a new coin added in the circulation. It is pretty similar to a car race competition where many participants participate and aim to win, but whoever reaches the destination very first eventually wins and gets the reward. 

The mathematical equations of the crypto transactions cannot be solved manually. The miners need to set up an entire crypto mining system of computers for that. Today, crypto mining machines have got advanced and so solving equations has also become more complex. At the same time, the competition in crypto mining has increased as well. 

How to Start Mining? Are You Eligible for Crypto Mining? 

First things first, there are no eligibility criteria for starting mining crypto. Any individual with strong technical knowledge of blockchain can start mining cryptocurrencies. However, there are some fundamental requirements to start mining cryptocurrencies, including:

  • An advanced crypto mining machine or system
  • A software that is specifically designed to solve cryptographic mathematical problems
  • A secure and reliable internet connection 
  • 24/7 electricity supply
  • Electricity backups for emergency usage
  • Membership of a mining pool
  • A huge investment

In the early days of crypto mining, the miners only needed their personal computers and CPU chips to mine cryptocurrencies. Over the years, things have changed a lot. The mining technology has evolved, got more complex, and so the competition has increased a lot. Today, you can’t mine cryptocurrencies using your personal computer. If you think of using your personal computer to mine crypto these days, forget about multiplying your coins because you will not even survive in the market.  

Today, you need a specialized GPU or ASIC (application-specific integrated circuit) system for crypto mining to not only survive but to keep increasing the number of your circulated digital coins. 

Is Crypto Mining Profitable? 

As we have mentioned above, in the early days of mining, the miners used to mine crypto using a CPU chip and a personal computer. The expenses were very low and so the profit was really good. But since the technology has evolved and the competition has increased in crypto mining, the profits are no longer the same because the expenses are too much. Still, crypto mining is giving lots of rewards to many miners across the world. 

Many factors determine whether crypto mining is profitable or not, including the cost of electricity used to power the mining machine, the price of the machine, and competition in mining. 

In the end, we would suggest that if you are excited to dive into the world of crypto mining, make sure you have enough resources and more than enough to invest.