How Bitcoin Is Mined – A Complete Guide

Chances are you’ve heard of the phrase “Bitcoin mining” and that’s the reason you searched Google with a term like “how Bitcoin is mined” which brought you to our wonderful site. Web.

So let me start by answering what Bitcoin mining is?

Bitcoin mining is nothing more than a process that adds transaction records to Bitcoin’s public ledger, also known as blockchain. While this process is much less glamorous and just as uncertain, this mining process is often performed by high performance computers, which can solve very complex computational problems, which cannot be done manually. However, the luck and the work involved in solving these problems are enormous. Basically, the probability that a powerful computer will solve any of these problems is about 1 in 16 trillion.

So, now you might be wondering why Bitcoin mining is necessary? The answer to this is; it was necessary so that each transaction could be confirmed and each of the networks could access the general ledger. It is also used to distinguish legitimate Bitcoin transactions from illegitimate transactions. And every time a new block is sealed, a miner receives a reward.

So instead of wasting more time, let’s dig deeper into bitcoin mining!

Is Bitcoin Mining a Profitable Business?

During its early days, Bitcoin miners or early enthusiasts used to confirm transactions using their processors. However, with people starting to mine Bitcoin using industrial grade infrastructure, things have changed dramatically. Easy money is not so easy anymore and due to the growing nature of Bitcoin it has become much more attractive to individuals as well as large corporations which ultimately multiplied the competition many times over.

So, now you may be wondering if Bitcoin mining is worth it?

Be mistaken!! Yes! but currently it is only cost effective for those who use high power machines. If you search for the term how Bitcoin is mined while planning a smaller setup and smaller pools, you will be spending more money on your electric bill rather than generating one from mining. So, if you don’t have access to cheap electricity and high powered machines, it is almost impossible to profit from Bitcoin mining.

Additionally, if you are staying in an area where the risk of power outages, network issues are high, and you are still searching for the term how Bitcoin is mined, you should immediately abandon the research process.

However, as new mining software is under development and reaching new heights with the entry of cheap and sustainable electricity into play, once again Bitcoin mining can be profitable for individuals in the near future.

So if you are searching for the term “ how Bitcoin is mined ” with the intention of starting the mining process with a small setup, then this might not be the best time for you.

However, if you want to invest in high horsepower machines, there are few things you need to remember !!

Choosing the right hardware for Bitcoin mining

As Bitcoin mining involves a lot of complexity, it is very important to invest in the right set of hardware.

While answering the question of how Bitcoin is mined? we can avoid the hash rate. For Bitcoin mining hardware, the hash rate is a big issue. Essentially, this is the number of calculations the hardware can perform per second. And obviously, the higher the hash rate, the higher the chances of solving the math problem and collecting your reward. Hash rates are measured in Mega hashes per second, Gigas hashes per second, and Tera hashes per second.

Now comes the electricity. It is natural that the more powerful your equipment, the more electricity you will need to run it. So it’s always a good idea to factor in the power consumption of the equipment in watts and know how much your next electric bill might cost. Spending all of your hard earned money on the electric bill is never a good idea.

In order to get a better picture of your average power consumption, you can view the power consumption number and hash rates. To find out, you will need to divide the number of hashes by the number of watts. So now you can use an electricity price calculator or you can also check your electricity bill so you know how much it might cost you in cash.

If you are searching for the term “ how bitcoin is mined ” for the purpose of starting bitcoin mining, you shouldn’t overlook the electrical aspect as it can cost you a lot.

Additionally, in a few cases you might need your computer to run mining hardware. And it’s only natural for your computer to draw power from mining equipment, which could further reduce your bottom line.

Bitcoin mining hardware

During the early days of Bitcoin mining, many people were drawn to it. At that time, the value of Bitcoin was far from what it is today. And this has motivated a lot of people to mine Bitcoin, without the intention / idea of ​​making a lot of profit from it. At that time, miners were using decently powerful computers and laptops to generate hash sequences and confirm transactions.

Later, at some point, miners discovered the potential of high-end graphics cards, which can increase Bitcoin mining power. The graphics card consumes much less power and the results are much better than before. Later, dedicated mining equipment was introduced, which in turn increased mining capacity by several times. The newly launched mining hardware ultimately helped start the Bitcoin mining industry.

CPU for Bitcoin mining

When searching for the term, the “ how Bitcoin is mined ” processor is the least powerful part of the platform. In the early days of Bitcoin mining, a decently powerful computer and processor did all the work. However, with each passing day, miners started to innovate, which made CPU mining completely obsolete.

GPU for Bitcoin Mining

GPUs or graphics processing units cannot be ignored when responding to how Bitcoin is mined. These were specially designed for calculating complex polygons in video games, making them perfect for solving complex transaction blocks.

Even after costing a lot more than processors, these GPUs gave miners an added edge. Soon, the widespread use of the GPU gave birth to mining rigs, which were nothing but computers capable of solving complex calculations. These platforms were used for part-time mining and also served for other computing purposes.

However, with the introduction of hardware specifically designed for mining, GPU mining is mostly dead nowadays.

FPGA for Bitcoin Mining

You can’t just avoid FPGA mining while searching for the term “how Bitcoin is mined”. It is basically an integrated circuit, which can be configured after its construction. FPGA ultimately helped mining hardware manufacturers buy chips in bulk and customize them for Bitcoin mining purposes.

The FPGA device gave miners a much-needed advantage in energy efficiency and ease of use, which changed the Bitcoin mining landscape quite quickly. As an example, a 600MH / s graphics card could consume up to 400 watts of power, and an FPGA mining device would consume only 80 watts of power while giving a hash rate of 826 MH / s.


ASICs cannot be avoided when researching how Bitcoin is mined. It is basically a microchip designed for the sole purpose of mining Bitcoin. This technology has increased chopping power up to 100x while consuming much less power. According to some experts, ASIC is the end of line technology, because nothing can replace it in the near future.

So, this is “ how Bitcoin is mined ”. However, with recent political developments, many of our Indian readers have repeatedly asked us a question: “Is Bitcoin mining legal in India?” So, in our next article, we share our take on the legality of Bitcoin mining in India. Also, when you are done reading this article, be sure to read our guide to stay safe on the Internet.

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