Artistic description of bitcoin mining

What is Mining and do I need heavy hardware to start mining?

By TakluBalm | TakluBalm | 1 May 2021

The sound of the special ASIC machines running tirelessly in huge farms giving off tremendous heat and consuming enormous amount of power is what comes in most people's mind when they come across the word "mining". Everyone has heard of it but not all understand what it is.

Wait,wait... What exactly is mining?

Mining is an integral part of a proof-of-work (PoW) based cryptocurrency. It is the fundamental basis of the security of such a blockchain. It provides validity to the transactions and brings consensus among the nodes on the network.

A cryptocurrency network has various nodes which contain the entire blockchain of transactions in that network. These nodes listen for the transactions taking place in the network and put them in a block. The block contains previous block's hash along with the transaction to maintain order in the blockchain. This block must then be added to the blockchain in order to make it immutable. But this process has a twist, to prevent the malicious players adding false transactions the block makers have to pay a price. This price is computational work for PoW blockchains.  They have to find a number (nonce) that makes the hash of the block start with given number of zeroes. Hash is calculated using special hash functions. The miners are in a race to be the first one to find that special numbers and get rewarded for finding it (in the native currency of the chain). As the computing power of network increases harder it becomes to find this nonce which in turn means you need higher computational power to make profits by mining.

As bitcoin gained popularity the computing power of the network increased rapidly making it impossible for normal people to jump on the mining frenzy. This mining frenzy also led to formation of various mining pools where people share their resources to find a block and then rewards are distributed proportional to the help provided. This hype has lead to a new problems:

1) Huge amount of energy being wasted

2) General public is left out from the mining process.

Mining rig

What is the solution then?


The next generation of cryptocurrencies have tried to solve this problem by making their hash functions ASIC-resistant. They do this by altering the algorithm of the function in such a way that it proves to be spectacularly inefficient for ASICs. Such cryptos are trying to involve the general public in the mining process. There are various cryptocurrencies that provide such algorithms in their blockchain. Here is a list of some such cryptos:

  • Ether (ETH) : algo-ethash (Its high demand still requires high-end gpus)
  • Monero (XMR) : algo-RandomX
  • Vertcoin (VTC): algo-Verthash
  • Raven (RVN): algo-Kawpow
  • Feathercoin (FTC): algo-NeoScrypt

How to start mining?

A person with a medium to high end computer too can participate in the mining process and can take part in the consensus mechanism of their favorite coin. He/She must follow these simple steps:

  • Find the algorithm your coin uses for mining.
  • Check if it is ASIC resistant or not
  • Find a pool to join that can give you good returns ( Joining the pool ranking second in computational power is recommended as it helps keep the blockchain decentralised )
  • Find the mining software that is compatible with that mining algorithm ( Most of the pools suggest the software and provides a guide to setup your miner to mine with their pool )


Although all these coins are designed for CPUs/GPUs the better the CPU/GPU you use to mine the more your rewards will be. But they significantly decreases the initial investment needed to start mining. I hope this helped!


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