Bitcoin Mining made easy. A complete less techinical guide

Bitcoin Mining is the process through which Bitcoins are created on the Bitcoin network. Users utilize special software to solve complex math problems, and in turn, they are rewarded with a certain number of Bitcoins. The process creates a smart way to issue the currency and at the same time creates an incentive for more people to mine.

You can see mining as a lottery where your mining hardware competes with everyone else on the network ming for Bitcoins. If your hardware is faster, it will, in turn, make more tries to solving the math problems thereby increasing the chances of winning the lottery.

What is Bitcoin Mining?

It’s a process through which transactions are verified and added on the blockchain. It serves two purposes; It confirms transactions in a trustful manner when there is enough effort (computational power) devoted to create blocks. Also, it creates (issues) new bitcoins as rewards after every block is established.

The Process

  • A miner starts by trying to verify if a transaction is valid.
  • They bundle transactions in a block.
  • Then they select the header of the most recent block and insert it in the new block as a hash.
  • They solve the proof of work problem.
  • After finding a solution to the problem the new block is added to the blockchain and shared with the rest of the network.

What is proof of work concept?

It is a concept that was introduced in 2004 by Hal Finney and the idea of this scientist was adopted on the bitcoin protocol. PoW is a consensus algorithm that helps keep bad actors away who might want to abuse or attack the Bitcoin network.

It’s a piece of data that is difficult (time-consuming and costly) to produce and satisfy specific requirements. The process costs processing power which translates to energy, time and hardware.

With PoW, miners compete with each other to complete this process and get rewarded for the work done by their equipment.

What is Bitcoin mining difficulty?

Its a measure of how difficult it is to find a hash that is below the target value (a 256-bit number) during the proof of work. The target value is recalculated after every 2016 blocks which is approximately every two weeks.

The process works like a cycle that balances itself. As more miners join the network, the block creation rate increases. Therefore the average mining time decreasing which leads to the mining difficulty increasing. Hence this pushes the rate of block creation down and then the average time goes back to normal. The ideal average mining time is designed to be 10 minutes per block.

Bitcoin Mining block rewards

As we stated above, for using your hardware to complete the math problems required to mine Bitcoin, you get rewarded Bitcoins.

Block reward is, therefore, the number of Bitcoins that are released after every block is mined.


designed the reward to half after every 210,000 blocks which roughly translates to 4 years.

The initial block reward was 50 bitcoins back in 2009. This figure dropped to 25 bitcoins after four years and currently stands at12.5 BTC. This amount will keep on reducing until all the 21 million bitcoins have been released.

Types of Bitcoin mining

Bitcoin is widely mined through 2 methods; Cloud mining and Hardware mining.

Cloud mining also known as cloud hashing is a process that enables users to purchase mining capacity of hardware in data centres. It allows people to earn Bitcoins without having to manage the software, hardware, electricity or any other offline issues.

The process of mining the bitcoins is done remotely in the cloud. Consequently, this form of Bitcoin mining saves users from the hassles that are associated with the whole process such as electricity, heat, hosting issues, installation, and upkeep trouble.

However, there has always been mining scams associated with this type of Bitcoin mining. Below, we list a few respectable cloud bitcoin mining companies. Nevertheless, we are not endorsing these companies.

Genesis mining

: Genesis is the largest cloud Bitcoin mining company founded in 2013. The company provides different plans and depending on your budget, you can get a good plan with them


: Hashfare is another leading Bitcoin mining provider offering SHA-256 mining contracts. Though payouts are possible in Bitcoins, other cryptocurrencies can also be mined via Hashfare.

Advantages of Bitcoin cloud mining

  • There is no electricity cost.
  • No noise pollution as there are no humming fans.
  • There is no excess heat.
  • There are no ventilation problems with hot equipment.
  • No need to invest large sums in Bitcoin mining equipment.

Disadvantages of cloud Bitcoin Mining

  • Users need to be careful as fraud is rampant.
  • It offers lower profits.
  • One is not in possession of the Bitcoin mining hardware.
  • Bitcoin Mining contracts can stop operations or stop payouts in the contracts if the price of BTC is too low.
  • It’s no fun if you are the type that likes to build your hashing systems.
  • One lacks the ability to change the Bitcoin Mining software.

Over the years as the mining difficulty has gone up the type of hardware needed to mine bitcoins has become more specialized. At the start, it was easy to mine bitcoins using a CPU from the normal desktop computers.

As the crypto-coin gained more popularity and more people started participating in the activity, Graphics Processing Units (GPUs) became more popular as they were more effective than CPUs.

However, GPUs were overtaken by ASIC (Application Specific Integrated Circuit). Since their release in 2013, they have been improving with more efficient designs coming to the market. As of 2018, Bitcoin Mining is only profitable by using the latest ASICs.


This is the process of mining Bitcoins with the use of a PC or laptop. This was the only method available to mine Bitcoin when it was first created by Satoshi Nakamoto using Satoshi client.

Over the years, miners upgraded to other hardware making impossible to earn a single Bitcoin nowadays with a PC even after 50 years.


After CPU mining came GPU mining. This was due to its efficiency over CPU Bitcoin mining thanks to their high-end graphic cards. With GPU mining, more coins were being mined with the use of way less energy with more Bitcoins mined.

Some of the most common GPU mining types of equipment are provided by; AMD and Nvidia.


ASIC (application specific integrated circuit) is the next generation of Bitcoin mining hardware equipment. These types of Bitcoin mining equipment are designed to perform mining of only the coins it was designed for.

With the other mining hardware types of equipment, you can mine different types of coins but with ASIC miners, if they were designed for Bitcoin, they can’t Mine


or any other cryptocurrency.

This, however, comes with an advantage that they have more harsh power which is 100X higher than the other devices above and consume less energy making them more efficient while giving more Bitcoins at the same time.

Final words

Bitcoin mining is a form of getting rewarded for participating on the Bitcoin network. The heavier your equipment, the more Bitcoins you can mine. Though many think of huge investments in hardware when they hear of Bitcoin mining, they can also mine coins without bearing all the huge cost involved by using cloud mining.

Nevertheless, always do enough research before getting involved in cloud mining as it has been infiltrated with a lot of scam artists.

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