What Is Bitcoin Mining? How To Mine Bitcoin

You don't have to buy Bitcoin to obtain it. If you're looking to save a few bucks and snag some coins under their retail value, you can turn to Mining. To do that, though, you'll need to invest in something called a Bitcoin Mining Rig — a piece of hardware that's decked out with all the processing power you need to get Mining.

What Is Bitcoin Mining?

Before we take a look at what we feel is the best Bitcoin Mining Rig on the market, we first need to look at Bitcoin Mining as a concept, touching on what it is and why it's beneficial — if you're already familiar with the construct and the various advantages that come part and parcel with a reliable Bitcoin Mining Rig, feel free to skip ahead.

Whenever a transaction is lodged on the Blockchain, it needs to be confirmed a number of times before the funds are made available to the recipient. When sending funds through Coinbase, for example, three confirmations are required whatsoever. But with no manual interaction, how are these funds confirmed? The answer is simple: Mining.

Miners, computers dedicated to Mining, are tasked with solving a computational process to confirm a transaction is legitimate. Once solved, the transaction is awarded one confirmation on the Blockchain and the Miner (this time referring to the person behind the computer, which is also called the Miner) is credited a small transaction fee.

The more processes solved, the more transaction fees earned.

What Is A Bitcoin Mining Rig?

A Bitcoin Mining Rig is a computer that's been built for the sole purpose of Mining. They're designed to be kept independent from a standard computer system, so as to benefit from the full processing power on board, and often run streamlined Operating Systems that aren't full of unnecessary bulk — they can Mine, and that's it.

What Is The Best Bitcoin Mining Rig?

The best Bitcoin Mining Rig is the Coinmine One. Why? Because it's simple, efficient, quiet, and feature-packed. Seriously, a Coinmine emits less sound than an AC and pulls less power than a PlayStation. Try to find another Bitcoin Mining Rig (or as they're more commonly known, Bitcoin Miners) that can live up to the same claims.

What's more, should you decide you no longer want to mine Bitcoin, you also have the option to mine a different Cryptocurrency, with the list including Ethereum (ETH), Grin (GRIN), and Monero (XMR). Want to switch back to Bitcoin? No problem — load up the Coinmine application for Android and iOS, and you can flick between them.

Best of all, Coinmine (hey, that's us!) will let you earn interest on all the Bitcoin or Ethereum you earn, so long as you keep it as a balance in your Coinmine Wallet. Interest is currently set at 6.5% APR, compounding monthly.

Just keep in mind that Coinmine Interest is not available on funds deposited into a Coinmine Wallet from an external account. It's limited to balances obtained by mining with a Coinmine One, mining with a Coinmine Cloud Miner, or other grants distributed by the Coinmine team, like the Founding Member's Reward.

Can Bitcoin Still Be Mined?

Out of the 21,000,000 Bitcoin that can ever exist, around 18,000,000 have been mined — meaning there are 3,000,000 Bitcoin out there just waiting to be earned. To put those numbers into perspective, one Bitcoin is currently worth $8300. That's a massive $25 billion in unclaimed Bitcoin, all of which will be awarded to Bitcoin Miners.

Of course, to be in with a shot of taking home a sizeable slice of the fortune, you'll need to be equipped with a Bitcoin Miner — also known as a Bitcoin Mining Rig — like the Coinmine One, which is tasked with nothing but amassing a small fortune for its owner, or a computer running Bitcoin Mining Software like our own MineOS. 

While there are other Bitcoin Mining Rigs out there, we're yet to stumble upon a Plug-and-Play Bitcoin Miner as simple and feature-rich as the Coinmine One. Just plug it in, set it to mine Bitcoin, and it'll handle the rest. No building or coding required. Plus, you always have the option to switch between different Cryptocurrencies.

Is Bitcoin Mining Legal?

For the most part, Bitcoin Mining is legal so long as you reside in a country where you're allowed to hold a Cryptocurrency balance. There are a couple of nations that are exceptions to this rule, allowing residents to transact but not Mine. We've combined them in the list below, so if you reside in one of these places, best steer clear:   

  • Afghanistan
  • Algeria
  • Bangladesh
  • Bolivia
  • Pakistan
  • Saudi Arabia
  • The Republic of Macedonia
  • Vanuatu 
  • Vietnam

If you don't reside in one of those countries, you should have no issues Mining. Although, it's worth noting that laws change all the time and while we've done our best to accumulate the most accurate information, sources can be unreliable at times. So if you're unsure, best contact your local citizen's advice bureau before turning to Mining.

Is Bitcoin Mining The Cheapest Way To Get Bitcoin?

Bitcoin is the most sought-after Cryptocurrency in the world, so it should come as no surprise to hear that it’s also the most valuable — with a single Bitcoin fetching $8400 as of March 8, 2020. But you don’t have to fork out that much to acquire one. In fact, it's possible to obtain one for a fraction of that price (and it's legal). How? Mining.

We ran the numbers and it turns out Mining is still the cheapest way to amass Bitcoin in 2020. In the US, it costs around $4700 to fund the electricity required to power a computer for the duration of time needed to mine a whole Bitcoin (a Coinmine uses a lot less power), which is half of the value of a Bitcoin right now. That's a steep return.

However, if you’re looking to stack up some Crypto on the cheap, Bitcoin isn’t the way to go. That would be Ethereum, which currently has a value of $244. It costs around $150 to mine one Ether in the US, so the return on investment isn’t quite on par with Bitcoin, but it’s a lot more affordable a starting point and can still amass to a small fortune.

There are several other tokens that are well worth mining right about now, as they’re relatively cheap to process and are poised to spike in value in the near future, including Monero and Zcash. The easiest way to do this? With a Coinmine One, of course. Just pop it in the corner of your living room and it'll make you money day in, day out.

The fact of the matter is, though, Bitcoin Mining is the cheapest way to get Bitcoin.

Is Bitcoin Mining Safe?

Bitcoin can be hacked and stolen, so take a second to secure your Bitcoin Wallet by either activating Two-Factor Authentication (2FA) for a Hot Wallet — Coinbase Wallet, for example — or storing your Cold Wallet (think: Ledger Nano S) in a safe or different secure environment where it isn't within arm's reach of an intruder.

Following this advice won't eliminate the risk of your Bitcoin being stolen, since no computer system is immune to being compromised, nor is no safe unpenetrable, but it does reduce the likelihood of your Bitcoin Wallet being drained. It's like a bank account — your money can still be stolen, but it's less risky than keeping it under the bed.

If you're serious about adopting Bitcoin, we recommend splitting your balance between two Bitcoin Wallets: a Cold Wallet and a Hot Wallet. Transfer what you require for your daily spending to a Cold Wallet, then leave the rest in a Hot Wallet, stored in a safe. 

What Can You Do With Mined Bitcoin?

Quite a lot, actually.

Despite being developed to serve a real-life purpose, most people use Bitcoin as a means of investment, but it's actually meant to be tender. This means you can send it and spend it just as you would a Dollar. There's no shortage of retailers that accept it, either — Expedia, Microsoft, and even Subway all accept Bitcoin as a means of payment.

Bitcoin Mining Glossary

Venturing into the wonderful world of Bitcoin? You'll come across a few new terms that could leave you scratching your head. If that's the case, take a look at our Bitcoin Glossary — it contains everything you could ever need to know.

  • Bits —  A sub-unit of a Bitcoin. There are 1,000,000 Bits in one Bitcoin.
  • Block — A collection of Bitcoin transactions that occurred during a specific period of time. Think of it as one page in a ledger, with the ledger itself being the Blockchain.
  • Blockchain — A digital record of every Bitcoin transaction that's ever occurred. It's a bit like a massive virtual ledger; all transactions and balances are recorded on it.
  • BTC — An abbreviation of Bitcoin.
  • Cold Wallet — A Bitcoin Wallet that is in cold storage, meaning that it's not connected to the Internet. It's stored offline on a ledger, hard drive, or something similar. 
  • Confirmation — A Bitcoin transaction is considered Unconfirmed until it has been included in a Block on the Blockchain, at which point it has one. The inclusion on additional Blocks marks additional Confirmations. A Transaction is considered Confirmed when it has six Confirmations.
  • Distributed Ledger (Ledger) — A virtual logbook that tracks all balances and transactions in a decentralized format that's visible to the public.
  • Hash — The definition is two-fold: 1) The unique identifier of a Bitcoin transaction; 2) A mathematical function Miners perform on Blocks to make the network secure.
  • Hot Wallet — A Bitcoin Wallet that's located on a device that is connected to the Internet, like a computer, smartphone, or tablet. 
  • Miner — A computer dedicated to processing a transaction. It's tasked with solving a computational process that’s triggered when a transaction is initiated to confirm it’s legitimate.
  • Paper Wallet — A form of Cold Wallet where Private Keys are printed on a piece of paper, written on a Post-it, or stored on another physical medium.
  • Satoshi — The smallest divisible unit of Bitcoin recorded on the Blockchain. It carries a value of 0.00000001 BTC, one-hundred-millionth of a single Bitcoin.
  • Transaction — An entry in the Blockchain that outlines the transfer of Bitcoin from one address to another. Sometimes one main Transaction contains a number of smaller sub-Transactions.