There was a time when anyone with a graphics card--or even just a CPU--could mine some Bitcoin and turn a profit. That time has long since passed; these days, you need an application-specific integrated circuit (ASIC) setup to even have a shot at making some money. But why did Bitcoin go from being an easy money maker to something few can afford to mine?
The answer lies with one of Bitcoin’s basic principles, which makes the cryptocurrency harder to mine as it grows in popularity. That way, having a bunch of people mine Bitcoin won’t undermine its value. It’s almost like circulating a limited number of U.S. dollars so each one is worth more, comparatively, instead of thinking you can create wealth by literally printing money.
Not that you have to print Bitcoin, of course. Instead, when you’re “mining” the cryptocurrency, you’re basically tasking whatever device you’re using with solving a bunch of math problems.
How Bitcoin Is Mined
Bitcoin, like seemingly every other technology these days, is based on the blockchain. The blockchain is pretty much what it sounds like: a series of interconnected “blocks.” In Bitcoin’s case, these blocks are used as transaction ledgers that make sure every exchange of the cryptocurrency is legitimate. Instead of trusting a central figure, like you do with traditional currencies, you’re trusting the math behind Bitcoin to ensure everything is on the up-and-up.
Doing all that math requires some computational resources. That’s what your mining rig is--a system that downloads the blockchain, does a bunch of math, and assures the rest of the Bitcoin ecosystem that a given transaction was legitimate. In exchange for devoting your rig to preserving this system, you’re given a certain transaction fee as well as a subsidy of new coins--hence the “mining” metaphor that compares earning Bitcoin to digging up something like gold.
Unlike gold, however, Bitcoin isn’t a naturally limited resource. One could theoretically design a cryptocurrency that allows someone to earn as much as they want as long as they have the hardware to back it up. But that would devalue each unit (or “coin” for most cryptocurrencies). Instead, Bitcoin was designed in a way that ensures the creation of new coins is stable over the long term. As more Bitcoin is created, each individual Bitcoin gets harder to mine.
Weighing The Costs Of A Mining Rig
This increasing complexity makes it harder for general hardware, like an off-the-shelf CPU or GPU, to mine Bitcoin. The days of being able to mine Bitcoin while your system would otherwise be idle are pretty much over; you’re not going to make any real money that way. Instead, dedicated Bitcoin miners have to create “mining rigs” devoted specifically to Bitcoin mining.
Each mining rig is the result of basic cost-benefit analysis. You have to think about how much the system will cost to assemble, how much it will add to your power bills, and how much you expect to make in real-world money before you actually build the thing. (We explained that process as it relates to Ethereum, another popular cryptocurrency, here.) It doesn’t make sense to spend an exorbitant amount of money up front, and monthly, on a rig that makes a pittance each month.
Combine the need to pay for parts and power with the increasing complexity involved with mining Bitcoin, and you have a situation where CPUs and GPUs have been effectively pushed out of the mining game. To answer the question in the headline: You can, technically, mine Bitcoin with your PC. The problem is that doing so would be like trying to mine gold with a soup ladle while other people are out there with heavy equipment and teams of workers who all specialize in mining.
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Nathaniel Mott is a freelance news and features writer for Tom's Hardware US, covering breaking news, security, and the silliest aspects of the tech industry.
Instead of trusting a central figure, like you do with traditional currencies, you’re trusting the math behind Bitcoin to ensure everything is on the up-and-up.
Doing all that math requires some computational resources. That’s what your mining rig is--a system that downloads the blockchain, does a bunch of math, and assures the rest of the Bitcoin ecosystem that a given transaction was legitimate.
Just to expand/clarify this a bit, miners aren't actually performing any 'useful' work while mining, at least not in the traditional sense of the term. They're all just brute force guessing the answer to a puzzle, and when that answer is found it has no use other than satisfying some difficulty threshold used to keep the rate at which answers are found at a roughly constant rate regardless of aggregate miner hashing power. You can run a full node that can be used to validate the integrity of the blockchain without any mining.
The purpose of Proof of Work (mining) is to make it prohibitively costly to attack the network (double spend or block transactions), i.e. perform a 51% attack. To do so would require a large upfront cost of mining equipment, as well as a large energy cost used to create the blocks.
You can technically acquire bitcoin with your PC by using Nicehash.Reply
It basically rents your computer out to other people who use your computer to mine other coins like Ethereum or bitcoin gold.
Your "renter's fee" is always paid back to you in bitcoin regardless of what your computer actually mined.
On average for me I make about 15% more per month with Nicehash versus just mining straight Ethereum.
Your winnings will vary with nicehash meaning 1 minute you might make 5 dollars, the next 10 which means you averaged 7.5 dollars, but the average is still higher than mining straight Ethereum which in this example might be 6 dollars.
I use dollars to simplify this, in actuality you would be paid in bitcoin.
5 dollars would have been 5/8300 or a payout of 0.0006 bitcoin
Once you have been paid with nicehash you can transfer your bitcoin to your coinbase account for free and then use GDAX to convert that bitcoin into 1 of the other flavors if you wanted to.
Wow i see tomshardware still supports and spreads the cancer of miningReply
Because gaming is a use that gives better return on the same equipment? If you want to put forth a legitimate argument for why using computer equipment for mining is immoral or somehow wrong, feel free. Vilifying mining with slurs doesn't benefit the discussion a whole lot.20962299 said:Wow i see tomshardware still supports and spreads the cancer of mining
I hope the crypto mania dies down soon so GPU prices come back down in priceReply
Why do you have this article? I guess it has been a while and we're seeing new writers. I've been here in Tom's since I built an Athlon XP machine. It is here in Tom's where I've first heard of bitcoin and continued to disregard it throughout the years until last year. It could have been huge money if I mined it back in the day.Reply
Actually, the answer is much simpler. This is already an article in Tom's since the first ASICs for bitcoin. ASICs are just much more efficient for this work than CPU/GPUs. They cost less, use less power, much faster, and a lot easier to deploy. With all these attributes and countless ASICs that are online, it has killed the profitability of CPU/GPU mining of bitcoin.
Currently, due to extreme popularity and countless SHA-256 (bitcoin) already mining in the world and we are in the low of end value of the crypto market, it is not profitable unless your electricity costs less than $ 0.2 KWH.
I do multi-coin alt mining with miningpool instead. But more importantly I get paid in litecoin because the transaction fees are WAY lower than the more popular bitcoin and etherium, which is important because I turn it into real money instead of trying to figure out ways to pretend bitcoin is useful as a currency.
I'll be glad when this money-for-nothing cancer/fad dies down. If you want to make money, work for it.Reply
With morals like that I assume if you tripped over $10 you would leave it there since you didn't work for it.
I dislike crypto-mining too but it's not money for nothing. You are renting your computer as part of the blockchain transfer process of digital currency... there's also risk involved due to initial investment combined with depreciation so in many ways it's analogous to say buying real estate to rent out to people (is that not working too?).
I don't expect the PC graphics card market to handle this in the future as there will end up some optimized ASIC or similar method that makes it unprofitable for the average person... I thought that happened the first time too so hopefully it disappears (for PC) in 2018 completely.
This article is a poor attempt in discouraging people from diving into crypto currency. Big fail! Author is most likely being sponsored by a crypto hater or a bankster.Reply
Bitcoin is only ONE type of digital coin. Most people see the top 100 coins, but there are over 1,000 digital currencies. Saying it is too late to get into crypto would be the same as someone saying it is too late to learn about the internet. It's NEVER too late.
Also, there are exchanges where people can exchange one type of digital currency for another. The most profitable coin as of now (5/14/18 @ 8:54 am CST) is ETHERUM. It's not difficult to mine ETH and exchange it for Bitcoin or any other digital currency.