Bitcoin Mining: What It Is and Can You Do It at Home?

Note (September 2026): Earlier versions of this article said Bitcoin can be mined on an ordinary computer with no special hardware or extra electricity cost, and that most mining happens in China. Those statements were wrong: mining now requires ASIC machines with large power costs, and China banned crypto mining in 2021.

Bitcoin mining is the proof-of-work process that adds new blocks to the Bitcoin blockchain and issues new bitcoin, currently 3.125 BTC per block. Anyone can mine from home where it is legal, but it needs a specialized ASIC machine, and at average US household electricity rates a modern ASIC costs more in power than it earns (as of September 2026).

Key Takeaways

• Bitcoin mining secures the network with proof of work: miners hash blocks with SHA-256 until one finds a hash below the difficulty target, about every 10 minutes.
• The block reward has been 3.125 BTC since the 20 April 2024 halving; the next halving is expected in 2028 at block 1,050,000.
• Home PCs and GPUs are no longer viable; ASIC miners such as the Bitmain Antminer S21 (200 TH/s, 3,500 W) are the standard.
• At September 2026 hashprice, an Antminer S21 breaks even only below roughly 9.6 cents per kWh, well under the US average residential rate of 18.31 cents.
• In the US, mined bitcoin is taxable income at its fair market value on the day it is received, according to IRS Notice 2014-21.

Among the money topics people search for most, Bitcoin and its cryptocurrency remain near the top of the list. The Bitcoin price is volatile, and whether to buy it, or to mine it, is a regular debate at work and at home.

Well, before one can decide on that, why not have a brief summary of what actually is bitcoin mining. Once you understand that, we will also look at if you can do it from home!

What is Bitcoin Mining?

Well, we all have been reading in the Letsgobitcoin news about buying bitcoin. Most buyers use cryptocurrency exchanges, and since January 2024 US investors can also buy spot bitcoin exchange-traded funds (ETFs) on American stock exchanges. In contrast to buying, Bitcoin mining is the process that adds new blocks of transactions to the Bitcoin blockchain and issues new bitcoin: miners run specialized computers, and the miner who finds a valid block receives newly created bitcoin plus the transaction fees in that block.

1) Can I do it at home?

Technically yes, but profitably, rarely. Bitcoin is not issued or controlled by any government or central bank, so anyone can run mining software where mining is legal. In practice, an ordinary computer cannot compete: Bitcoin-specific ASIC machines are now the primary way to mine, and at average US household electricity rates even a modern ASIC costs more in power than it earns (see the worked example below). Mining is also banned in some countries, including China since 2021.

2) How does the Bitcoin Mining work?

Bitcoin runs on a public blockchain that no government owns. Mining uses proof of work: miners repeatedly hash a candidate block with SHA-256 (applied twice), changing a number called the nonce, until the result is numerically smaller than the network’s difficulty target. The first miner to find a valid hash adds the block and collects the block reward, which has been 3.125 BTC since the halving of 20 April 2024. A new block is found about every 10 minutes on average, and the difficulty is recalibrated every 2,016 blocks (roughly two weeks) to keep that pace. The block chains are decentralized and the networks use them to record transactions.

3) Common claims about home Bitcoin mining, corrected

Skeptical about the claims made for home Bitcoin mining? The reasons often given for mining at home are listed below, each followed by a correction, because several of them are not true –

• Claim: no special hardware is needed. Correction: Bitcoin-specific ASIC machines are now the primary way to mine and have surpassed GPU speed by as much as 300-fold, so an ordinary PC cannot mine profitably even if you install the blockchain software in your system.
• Claim: mining does not heat up your equipment. Correction: ASIC miners run around the clock at high power and need active cooling and good ventilation; the Bitmain Antminer S21, for example, draws about 3,500 W continuously.
• Claim: there is no extra electricity cost. Correction: electricity is the main running cost of mining. An Antminer S21 running for 24 hours uses about 84 kWh, which at the US average residential rate of 18.31 cents per kWh (July 2026, US Energy Information Administration) costs about $15.38 a day.
• Claim: anyone can do it anywhere. Correction: no certification is required, but mining is not legal everywhere (China banned it in 2021), and profitable mining needs cheap electricity, efficient hardware, a mining pool account and tax records.

4) The Bitcoin Mining Kit

A working Bitcoin mining setup today has four parts: an ASIC miner built for the SHA-256 algorithm, a power supply and electrical circuit that can deliver the machine’s rated wattage, a Bitcoin wallet address to receive payouts, and a mining pool account, because a single machine almost never finds a block on its own. Time and patience do not replace efficient hardware and cheap power.

Bitcoin mining has grown from a bedroom hobby into an industrial business dominated by large mining pools and data-center-scale operators. Mining is not a guaranteed investment: revenue depends on the bitcoin price, the network difficulty and the block reward, which halves every 210,000 blocks (about every four years).

China once hosted a large share of the world’s Bitcoin mining, but all cryptocurrency trading and mining were banned there in 2021. According to figures cited by Wikipedia, in October 2025 the United States was the largest mining country with 38% of global bitcoin mining, followed by Russia (16%) and China (14%). Mining companies do not handle Bitcoin transactions in factories; they compete to add blocks to the shared blockchain, and most blocks are now found by large mining pools.

Before buying mining hardware, calculate the numbers with your own electricity rate, confirm that mining is legal where you live, and consider speaking to a qualified tax professional. This article is general information, not financial advice.

How Does Bitcoin Mining Work, Step by Step?

Bitcoin mining works by turning electricity and computing power into proof of work that the rest of the network can check almost instantly. The process repeats for every block:

1. Collect transactions. A miner gathers pending transactions into a candidate block.
2. Hash the block header. The miner runs the block header through SHA-256 twice, changing the nonce each time, producing a new hash on every attempt.
3. Beat the target. When a hash is numerically smaller than the network’s difficulty target, the block is valid and is broadcast to the network.
4. Collect the reward. The winning miner receives the block subsidy (3.125 BTC since April 2024) plus the transaction fees in the block.
5. Adjust the difficulty. Every 2,016 blocks, about two weeks, the network recalibrates the difficulty so that blocks keep arriving about every 10 minutes on average.

The block subsidy started at 50 BTC and halves every 210,000 blocks: 25 BTC from late 2012, 12.5 BTC from 2016, 6.25 BTC from 2020 and 3.125 BTC from 20 April 2024. Issuance stops at a hard cap of 21 million BTC, which is expected to be reached around the year 2140. The site’s article on the evolution of the Bitcoin supply covers the supply side in more detail, and this beginner’s guide to the Bitcoin mining process is a companion read.

Bitcoin Mining by the Numbers

The figures below describe the Bitcoin network as of late September 2026. Live figures such as hashrate, price and hashprice change daily.

Can You Mine Bitcoin at Home Profitably? A Worked Example

Home Bitcoin mining is profitable only where electricity is cheap. The example below uses the Bitmain Antminer S21, released on 14 August 2023 and listed by Hashrate Index at 200 TH/s, 3,500 W and 17.5 J/TH, together with September 2026 market data.

Hashrate Index shows the same machine earning a small profit of about $3.04 a day only at an electricity cost of roughly 6 cents per kWh, far below the US household average. The calculation also leaves out the purchase price of the machine, pool fees, cooling and the next halving, which will cut the block subsidy in half. Anyone paying a household tariff can check their own rate first; the site’s guide to saving electricity at home explains where a power bill goes.

Why is a regular PC or GPU not enough?

A regular computer is not enough because Bitcoin-specific ASICs have surpassed GPU speed by as much as 300-fold, and ASICs are now the primary method of mining. Even an ASIC is tiny next to the whole network. A 200 TH/s machine is about 1/4,790,000 of the network’s roughly 958 EH/s, so mining solo it would find a block on average only once in about 91 years at September 2026 difficulty. That is why individual miners join mining pools.

Solo Mining vs Mining Pool vs Buying Bitcoin

In the month to 27 September 2026, the largest pools by blocks found were Foundry USA (about 25.5%), AntPool (about 19.3%) and F2Pool (about 14.9%), according to mempool.space. Coins received from a pool need a secure wallet; see the site’s guide to choosing a Bitcoin wallet. For price exposure without hardware, the site also explains how cryptocurrency ETFs work.

Risks and Common Mistakes in Bitcoin Mining

• Using the wrong electricity price. A US home paid 18.31 cents per kWh on average in July 2026, according to the EIA, so check your own tariff rather than a low default rate.
• Ignoring the halving. The block subsidy halves every 210,000 blocks, so the next halving (expected in 2028) cuts subsidy revenue per terahash in half unless the price rises.
• Ignoring difficulty. Difficulty is recalibrated every 2,016 blocks; when more machines join, each machine earns less bitcoin.
• Trusting guaranteed returns. According to the US Federal Trade Commission, scammers guarantee that you will make money or promise big payouts with guaranteed returns; legitimate mining income is never guaranteed.
• Forgetting hardware wear. Mining hardware physically degrades through use, which creates electronic waste and replacement costs.

Is Bitcoin Mining Legal, and How Is It Taxed?

Bitcoin mining is legal in the United States but not everywhere: China banned all cryptocurrency trading and mining in 2021. Rules differ by country, so miners should check local law and utility rules before buying equipment.

In the US, the IRS says in Notice 2014-21 (answer A-8) that when a taxpayer successfully mines virtual currency, the fair market value of the coins on the date of receipt is included in gross income. Under answer A-9, if mining is a trade or business and not done as an employee, the net earnings are subject to self-employment tax. The site’s guide to Bitcoin taxation covers the investor side.

According to the FTC, US victims of a crypto scam can report it to the FTC, the Commodity Futures Trading Commission, the Securities and Exchange Commission and the Internet Crime Complaint Center (IC3), and should also contact the cryptocurrency exchange they used to send money.

Where Does Bitcoin Mining Happen Today?

Bitcoin mining is now led by the United States. According to figures cited by Wikipedia, in October 2025 the US held 38% of global bitcoin mining, followed by Russia (16%) and China (14%), even though China banned mining in 2021. On energy, miners surveyed for the 2025 Cambridge Digital Mining Industry Report said 52% of their electricity came from sustainable sources, including renewables and nuclear, and 48% from fossil fuels. Bitcoin mining has been estimated at about 0.5% of global electricity consumption and 0.08% of world greenhouse gas emissions.

Frequently Asked Questions

How much bitcoin does a miner get for one block?

A miner who finds a block receives the block subsidy of 3.125 BTC plus all transaction fees in that block. The subsidy has been 3.125 BTC since the halving of 20 April 2024 and is expected to fall to 1.5625 BTC at block 1,050,000 in 2028.

Can I mine Bitcoin on a laptop or phone?

A laptop or phone can run mining software but cannot mine Bitcoin in any meaningful amount. Bitcoin-specific ASIC machines have surpassed GPU speed by as much as 300-fold, and the whole network ran at about 958 EH/s in late September 2026.

How long does it take to mine one bitcoin at home?

An Antminer S21 in a pool earned about $8.08 a day in September 2026, so earning the value of one bitcoin (about $84,835 on 27 September 2026) would take roughly 29 years at that difficulty and price, before electricity costs. Difficulty and price change constantly, so this is only an illustration.

Is Bitcoin mining still profitable?

Bitcoin mining is profitable mainly for operators with cheap power and efficient machines. At September 2026 hashprice, an Antminer S21 breaks even at about 9.6 cents per kWh, while the average US home paid 18.31 cents per kWh in July 2026.

Do I have to pay tax on mined bitcoin?

In the US, yes. IRS Notice 2014-21 says the fair market value of mined virtual currency on the date of receipt is gross income, and mining run as a trade or business is subject to self-employment tax. Other countries have their own rules.

Is Bitcoin mining banned anywhere?

Yes. China banned all cryptocurrency trading and mining in 2021. Laws, energy rules and taxes vary between countries, so check the rules where you live before buying equipment.

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