Here are the basics you’ll need to start mining Bitcoin:
- Wallet. This is where any bitcoin you earn as a result of your mining efforts will be stored. A wallet is an encrypted online account that allows you to store, transfer, and receive bitcoin or other cryptocurrencies. Companies such as Coinbase, Trezor, and Exodus all offer wallet options for cryptocurrencies.
- Mining software. There are many different providers of mining software, many of which are free to download and run on Windows and Mac computers. Once the software is connected to the necessary hardware, you can withdraw bitcoins.
- Computer equipment. TThis includes the most expensive bitcoin mining hardware. You need a powerful computer that consumes a lot of electricity to mine bitcoins. It is not uncommon for hardware to cost $10,000 or more.
Risks of Bitcoin mining
- Price volatility. Since its inception in 2009, the price of Bitcoin has fluctuated greatly. As of November 2021, Bitcoin has traded between a low of $20,000 and a high of around $69,000. This kind of volatility makes it difficult for miners to know if their reward is greater than the high cost of mining.
- Regulation. Very few governments have accepted cryptocurrencies like bitcoin, and many may view them with suspicion as funds that operate outside of government control. As China did in 2021, there is always the risk that governments may ban the mining of bitcoin or cryptocurrencies, citing financial risks and speculative trading.
