Bitcoin mining has changed significantly since it started in January of 2009. This guide is designed to walk newcomers through the basics of modern bitcoin mining in 2018. We will update this guide as the mining landscape changes in the future. Bookmark this page and use it for reference in the future.
In 2018 there are three different parts to mining bitcoin. Each part is as important as the others, so make sure you understand each section before moving on to the next. As with all articles on h/s, feel free to leave any questions you may have in the comment section and we’ll answer as many as we can.
Part 1: The hardware
🗹 ASIC hardware is mostly made in China, so finding and shipping mining hardware is sometimes difficult. Take a look at our always up-to-date list of manufacturers and vendors that you can purchase bitcoin mining hardware from.
The focus of bitcoin mining is the hardware. When bitcoin mining started in 2009 the network difficulty was low enough to use desktop computers to mine coins. Since bitcoin has become more popular miners must use a special computer, called an ASIC, to mine for bitcoins. Modern ASIC hardware can mine bitcoins thousands of times faster than desktop computers.
Bitcoin mining ASIC computers do not look like ordinary desktop or laptop computers. They are designed to be smaller so miners can fit more units into less space. Most modern ASIC devices come in the ‘tube’ design like you see here:
Bitcoin ASIC miners use lots of power, and you’ll need to purchase a power supply to plug into each unit. The power supply takes power from your wall outlet and splits it up into separate connections that plug into your ASIC miner. Your power supply will need to be able to provide the right amount of power for your bitcoin miner. Most modern ASIC miners use between 1000 and 1600 watts of power for each unit. Usually you can power one miner with multiple power supplies, like two 750 watt power supplies to run one 1200 watt Bitcoin miner.
You can sometimes use a regular computer power supply, but they are usually expensive. It’s cheaper to buy a server power supply and an adapter to power your miner. Server power supplies you’ll use look like this:
Finally, you will need an adapter and power cables to connect the server power supply to the ASIC miner. There are many type of adapters available, and most do exactly the same thing. Most adapters have eight to ten connections for power cables. The adapters look like this:
Power cables connect the power supply adapter to the bitcoin miner. They are usually called PCI 6-Pin cables and have the same plug on both ends. Most power cables look like this:
Your server power supply plugs into the wall on one end and into your adapter on the other end. The adapter uses the PCI 6-pin cables to plug into the ASIC miner. Most adapters have switch or button on them to turn the unit on. Once everything is connected and powered you are ready to move onto the next section.
Part 2: The pool
The second part of bitcoin mining is setting up and using a mining pool. A mining pool distributes work to your ASIC miners and keeps track of your reward. You will create an account with the mining pool so you can withdraw your reward later. Your mining hardware will not run without a working pool account.
There are many different pools to use but most of them work the same. Most pools charge a small fee to help pay for their servers, these fees are usually between one and three percent. Take a look at our pool status page to see some of the pools you can use.
In this guide we’ll show you how to setup an account on Slush pool, a crowd favorite that is easy to use and has a low fee. Anyone can create an account on Slush pool for free. To start, visit https://slushpool.com/home/ then click on the button in the top-right that says ‘Sign Up Here’:
You’ll be asked to create a username, add your email, and set a password. Once you submit that info, you’ll be asked to verify your email address. Click the link in your email from Slush pool to verify your account, then use the username and password you just created to login to the pool website.
After verifying and logging in, you now have everything you need to configure the software on your ASIC miner and start earning rewards with your miner. We’ll return to the pool after we configure the mining software on the ASIC miner.
Part 3: The software
Bitcoin mining software is what controls your ASIC computer. The software talks to your mining hardware, then it uses an internet connection to talk to a mining pool to get new work for your miners. When your miner completes the work the mining software sends the results back to the pool so you can receive your reward. You must have an Internet connection that is always on to mine Bitcoins.
Most modern ASIC miners come with built-in software or are meant to be connected to a controller that has the software in it. You setup the software by connecting to the bitcoin miner on your network. It is usually just a web page that you get to by using your web browser.
The most important part of the mining software is the pool configuration. This information is what the software uses to get work for your miner. The information has three parts: the pool server address, your username and worker at the pool, and your password at the pool. We’ll continue to use Slush Pool for this example.
Mining pools have different server addresses for miners in different parts of the world. Use the list on https://slushpool.com/help/get-started/getting_started to find the server closest to your miner. Since we’re in the US, we’ll use ‘stratum+tcp://us-east.stratum.slushpool.com:3333’ as our server address.
After selecting a close server, it’s time to input all this information into our mining software. Open your mining software in your web browser and navigate to the configuration page. These images show examples of mining software configuration pages:
Find the first pool and copy and paste the server address into the ‘URL’ field. For Slush, your worker name will be the name your created to log into the pool, then a dot (a period on your keyboard) then a name for your actual miner. It is not the email address that you entered when you signed up. In the example below, the account login is ‘johnnyboy’ and the name I picked for my miner is ‘miner1’ so my worker name is ‘johhnyboy.miner1’ The password for the miner is not your user login, and it’s important you don’t use that. The worker password isn’t used by most pools. For Slush you can put in anything, most people default to ‘x’ for the password.
After you add all the information for the first pool you can save the configuration. Different miners have different looking software but you should be able to find a save button on the configuration page. Once you save the configuration, if everything else is working you should be earning bitcoin soon. We’ll check the status page on Slush pool in our final section of this guide to make sure the miner is working.
Most mining software will let you setup three different pools so if one stops working the others can take over. Setting up more than one pool is important to make sure your ASIC miner is always making you money. The software will sometimes also show you how fast your mining ASIC is working, as well as how many shares of the reward you have since you started the miner last. It may also show you how fast the fans on your miner are spinning or how hot the miner is running.
At this point we have our Bitcoin ASIC miner powered up, configured and getting work from the mining pool. As the miner returns work to the mining pool you get credit towards a share of the next Bitcoin found. The faster your mining hardware is, the more shares you will earn.
Most pools will start paying out reward shares a few hours after your miner is connected and working. Slush pool shows you what ‘Scoring Hash Rate’ your machine is getting paid for. It takes a few hours for that number to match what your miner’s speed is. If your hashrate speed is still zero after an hour it’s time to check your configuration again.
Most pools will want you to accumulate a small amount of bitcoin before they will send it to your bitcoin wallet. Pool operators do this to keep from sending thousands of tiny transactions that would clog up their servers. Some pools let you set a minimum yourself and some do not. On Slush pool we selected 0.0125 BTC as the minimum amount, as you can see in the dashboard image:
Slush pool has a setting to configure your payout address, and will automatically send any amount over your selected minimum a few times a day. As you can see from our dashboard, it will take us about five days before we get an automatic payout. As network difficulty goes up, the amount of Bitcoins we will receive for the same equipment will decrease. It will take us longer to get paid the same amount!
Bitcoin mining is a competitive race to make as many coins as possible using special ASIC hardware together with mining software and a mining pool. We hope you found this overview useful! If you have specific questions about the mining process leave a comment and we’ll answer as many as we can.