Bitcoin Mining Practical Guide: From Beginner to Cost Recovery Truth

Who is mining Bitcoin? What is mining exactly?

Here’s a straightforward question: have you ever thought about owning one BTC? If someone told you you could mine it “for free,” would you be tempted?

Unfortunately, that era is long gone.

The essence of Bitcoin mining is simple: miners use mining machines to perform computational work for the Bitcoin network, and the system rewards them in BTC. What is a miner? It’s those who own mining machines and participate in network accounting. What is a mining machine? It’s the hardware device that performs this work, from early ordinary computers to today’s professional ASIC miners.

Simply put: in the early days, some people used pen and paper to manually keep accounts; now, mining machines do it automatically. Anyone can participate, but success depends on your “hashrate” and “cost.”

Why learn about mining? Because miners are the main source of new Bitcoin supply, and their participation directly affects market supply and demand balance.

The technical principle of mining: Proof of Work mechanism

Bitcoin mining operates based on a system called “Proof of Work”(Proof-of-Work, PoW).

The specific process is as follows:

Transactions happen constantly on the Bitcoin network, which are consolidated into data packets called “blocks.” Miners’ task is to compete in computation, searching for a hash value that meets certain criteria—this process is like solving an extremely complex math problem, requiring countless trial-and-error attempts to find the answer.

Whoever finds the correct answer first gains the right to record the block. Once found, the new block is broadcast to the entire network for validation. After most nodes agree, this block is permanently added to the blockchain, and the successful miner receives a reward.

But here’s a key point: mining difficulty increases as total network hashrate grows. Currently, Bitcoin’s total network hashrate exceeds 580EH/s, making it nearly impossible for a single device to succeed independently. That’s why mining software and mining pools are essential—many people cooperate, contribute computing power, and share rewards proportionally.

Can mining really make money? Where do the rewards come from?

The answer is: yes, but not as simply as you might think.

Miner income mainly comes from two parts:

Block rewards: After successfully mining a block, the system automatically issues a certain amount of BTC. This reward halves every four years: 50→25→12.5→6.25→3.125BTC… Currently, it’s 3.125BTC per block.

Transaction fees: Users pay fees when transferring BTC, which are entirely market-driven and depend on network congestion. During periods of high transaction volume (like during the Ordinals craze), fee income can even surpass block rewards.

In theory, as long as mining remains profitable, people will continue mining, ensuring the Bitcoin network’s ongoing operation. If all miners stop, the network would fall into death. In simple terms, mining not only determines the stability of the Bitcoin network but is its vital infrastructure.

The evolution of the mining industry: from individual play to industry monopoly

Over the past decade, Bitcoin mining has undergone three major transformations.

Mining hardware iteration: From 2009-2012, ordinary CPUs could mine. In Q1 2013, GPUs and graphics cards became popular. Starting Q2 2013, professional ASIC miners (like Avalon, AntMiner) gradually dominated the market, with costs skyrocketing from hundreds to thousands of dollars.

Mining forms: Initially, solo mining was common—individuals or organizations mined independently. This lasted until around 2013. As total network hashrate surged, solo miners’ success probability plummeted, making it nearly impossible to break even. Then came pooled mining—miners combined their hardware into mining pools to work together. This further evolved into cloud mining, where entire pools are hosted in the cloud, known as “mining pools.” Currently, well-known pools include F2Pool, Poolin, BTC.com, AntPool, etc.

Reward distribution: From early solo gains to the current proportional sharing based on hashrate.

In summary, mining has evolved from an individual game into an industry dominated by large capital. Equipment costs have risen exponentially, participation shifted from individuals to groups, and rewards shifted from exclusive to shared.

Will individuals still be able to mine Bitcoin in 2025?

Frankly speaking: it’s very difficult.

In the early days, total network hashrate was low, and individuals could easily mine large amounts of BTC with their computers—making it almost “free.” But now—if you mine independently with a computer, your hashrate is too low to succeed. Joining a mining pool can theoretically earn rewards proportionally, but the actual BTC earned is minimal, often not even covering electricity costs.

Currently, for individuals to mine, three conditions must be met:

1. Buy professional mining hardware: Usually costing between $1,000-$2,000 or more. Avoid old models, as mining hardware advances rapidly, and outdated machines’ hashrate becomes negligible compared to new pools.

2. Join a mining pool: Even with a large miner, your individual hashrate is just a drop in the ocean compared to the pool’s total, making the chance to mine BTC very slim.

3. Bear ongoing costs: Including hardware, electricity, maintenance, operation, etc.—these need careful calculation.

Honestly, anyone legally allowed can mine, but due to low hashrate, they might not earn any BTC, or if they do, it’s so sparse that it can’t offset costs. That’s the reality.

The real costs of mining: How much does it take to mine one BTC?

To determine if mining is profitable, you must calculate costs precisely.

The cost to mine one Bitcoin involves multiple variables:

• Hardware costs: Purchase price of professional mining machines
• Electricity consumption: Power costs for 24/7 operation
• Cooling systems: Heat dissipation, air conditioning, liquid cooling
• Operational expenses: Network maintenance, routine upkeep
• Pool fees: Fees paid to mining pools

A simplified formula: Total mining cost = hardware cost + electricity + other operational expenses

According to public data, as of 2025-05-29, the total cost to mine one BTC is approximately 108,256.62 USD. This figure fluctuates with Bitcoin price, electricity rates, and new mining hardware efficiency.

Only when BTC price exceeds the mining cost can miners make a profit.

How halving events change the mining landscape

Bitcoin halving occurs roughly every four years and marks a watershed for the mining industry.

The fourth halving in April 2024 reduced the block reward from 6.25 BTC to 3.125 BTC, causing a huge impact:

• Earnings cut in half: The block reward drops by 50%. If BTC price doesn’t rise accordingly, profit margins shrink significantly.

• Mining downturn: Miners with high electricity costs or old hardware are forced offline, causing a short-term drop in total network hashrate, but it’s quickly replaced by larger, more efficient mining farms.

• Transaction fees become crucial: With increased activity from Ordinals, Layer2, etc., transaction fee revenue has risen. During the 2023 Ordinals craze, fees accounted for over 50% of miners’ total income.

Miners’ responses mainly include three strategies:

1. Reduce costs: Eliminate old hardware, upgrade to more energy-efficient models, relocate to regions with cheaper electricity or renewable energy.

2. Diversify mining: Use software that supports algorithm switching to mine other coins like Dogecoin or shift to trending new coins.

3. Hedge risks: Use futures contracts to lock in Bitcoin prices, avoiding losses from price drops.

Post-halving trends: Small miners struggle to survive, and hashrate concentrates in large farms. But it may also spur innovation—like “stranded energy” mining (using waste energy), AI-powered hybrid mining farms, etc., to improve overall profitability.

How to start mining? Practical guide

If you decide to enter this industry, these steps are essential:

Step 1: Confirm policy legality
Mining is energy-intensive, especially PoW. Many countries and regions impose strict restrictions or bans. Make sure your location permits mining.

Step 2: Choose mining method

• Buy and operate yourself: Purchase mining hardware and run it yourself. Requires expertise and attention to noise issues.
• Hosting services: Buy hardware and have third-party manage it.
• Rent hashing power: Rent from others without owning hardware.

Step 3: Select suitable mining hardware
Popular options include AntMiner S19 Pro (high hashrate, expensive), WhatsMiner M30S++ (good efficiency), AvalonMiner 1246 (cost-effective). Beginners should start with high cost-performance models.

Step 4: Choose a mining platform
If renting hashing power, platforms like NiceHash, Genesis Mining, HashFlare, Bitdeer are common. Select based on your needs.

Step 5: Go live
Once connected to a mining pool, start mining. Rewards are proportional to your hashrate. You can sell or hold the BTC earned.

Conclusion

Bitcoin mining is the process where miners use mining machines to keep network accounts, and the system rewards them in BTC. This mechanism has attracted massive investment, now forming a large industry increasingly dominated by big capital.

From hardware specialization, pooled mining, to reward sharing, the industry shows a clear trend toward centralization. The era of individual CPU or GPU mining is over. To mine BTC in the future, you’ll need to buy professional mining hardware or rent hashing power for pooled mining.

Final reminder: always verify policy compliance, ensure hardware authenticity, and carefully calculate costs before mining. Assess whether current BTC prices make mining profitable—don’t let the “get rich quick” dream cloud your judgment.