The Complete Guide to Cryptocurrency Mining in 2026: From Theory to Practice

In 2009, when Satoshi Nakamoto launched Bitcoin, mining could be done on an ordinary home computer. The first block yielded 50 BTC, which at the time was worth nothing. Sixteen years have passed, and mining has transformed into an industry with a capitalization of over $20 billion, with industrial farms consuming more energy than entire countries. During this time, the industry has survived four halvings, a ban in China, Ethereum's transition to PoS, and dozens of predictions about the "death of mining." But here's the paradox: with each crisis, the network has only grown stronger.

What is Cryptocurrency Mining and Why It's Critically Important

Cryptocurrency mining is not just the process of creating new coins. It's a fundamental mechanism that ensures the security, decentralization, and functioning of blockchain networks using the Proof-of-Work (PoW) algorithm. Imagine a banking system where, instead of a central regulator, thousands of independent participants simultaneously verify every transaction:

In October, the Bitcoin network's hashrate reached historic highs, exceeding 1161 EH/s, demonstrating a record level of network security:

Three Pillars of Mining

Security through computational power. To attack the Bitcoin network, an attacker would need to control more than 51% of all computational power. At the current hashrate, this means investments in equipment exceeding $20 billion plus colossal electricity costs. Economically, this is unfeasible.

Decentralization and censorship resistance. According to statistics, millions of mining devices are actively operating in more than 140 countries in 2025. This means that no single government or corporation can unilaterally control the network.

Fair emission. Mining creates a predictable, mathematically determined emission of new bitcoins. Unlike fiat currencies, where central banks can print money at their discretion, Bitcoin's emission is strictly limited to 21 million coins.

How Mining Works: From Theory to Practice

When you send a Bitcoin transaction, it enters the mempool—a waiting queue. Miners collect these transactions into blocks and begin solving a cryptographic puzzle: finding a number (nonce) such that the block's hash meets certain conditions.

It's like trying to find the combination to an extremely complex lock, where the only method is to try billions of variations per second. The first miner to find the solution gets the right to add the block to the blockchain and receives a reward.

Key Mining Metrics in 2025

Hashrate — the total computational power of the network. Can be tracked on Blockchain.com or Glassnode. The higher the hashrate, the more secure the network.

Difficulty — automatically adjusted every 2016 blocks (~2 weeks) to maintain an average block creation time of 10 minutes. Data available on BTC.com/stats.

Block reward — after the fourth halving in April 2024, it amounts to 3.125 BTC plus transaction fees. Current information can be found on Mempool.space.

Break-even Price — the BTC price at which mining remains profitable. According to analysts' calculations, the average break-even point for large mining companies in 2025 is $40,000 - $50,000 per 1 BTC.

The Economics of Mining: The Reality of 2025

Over 16 years, we've all witnessed at least five complete cycles of "mining is dying — mining is thriving." After each halving, analysts predict the industry's collapse, but history shows the opposite.

Capital Expenditures

A modern mining farm requires serious investment. The top-tier Antminer S21 costs $7,000-9,000 on the market. An industrial farm needs hundreds or thousands of such devices, plus infrastructure: cooling systems, electrical substations, buildings — this adds 30-40% to the equipment cost.

The geographic factor plays a huge role. According to CCAF data, the USA leads with ~38% of the global hashrate, followed by Kazakhstan (~18%), Russia (~51%), and Canada (~10%):

Operating Costs

Electricity is the main expense item. That's why miners migrate to regions with cheap energy: Norway's hydroelectric plants ($0.03-0.05/kWh), Texas gas fields ($0.04-0.06/kWh), Kazakhstan's excess energy. Current energy consumption data is available on the Cambridge Bitcoin Electricity Consumption Index.

Example Calculation for a Home Miner

Let's take a real case:

Investment: 1× Antminer S21 — $7800
Power consumption: 3500 W
Rate: $0.08 / kWh
BTC price: $120,000
Daily revenue: ~$20–22
Electricity costs: ~$6.7
Net profit: ~$14 per day / ~$420 per month
Payback period: ~18–20 months

Use calculators like WhatToMine or ASIC Miner Value for accurate calculations for your conditions.

PoW vs PoS: An Objective Comparison

After Ethereum's transition to Proof-of-Stake in September 2022, debates about the advantages of PoW and PoS intensified. Let's analyze objectively.

Advantages of Proof-of-Work

Time-tested security: Bitcoin has been operating for 16 years without a single successful attack on consensus. The network's economics are such that honest participation is more profitable than an attack.

Physical connection: PoW creates a real link between the digital asset and the physical world through energy costs. This makes an attack not only expensive but also physically resource-intensive.

Fair decentralization: Theoretically, anyone can buy an ASIC and start mining. In PoS, wealthy stakers automatically become wealthier.

Advantages of Proof-of-Stake

Energy efficiency: Ethereum after the Merge reduced energy consumption by 99.95% — from 94 TWh/year to 0.01 TWh/year.

Low barrier to entry: For staking in Ethereum, you need from 32 ETH for solo or from $10 to participate in pools. Compare with $8000+ for one ASIC plus infrastructure.

Scalability: PoS makes it easier to implement solutions like sharding.

Both systems have the right to exist. Bitcoin as digital gold needs maximum security and the conservatism of PoW. Ethereum as a platform for applications benefits from the flexibility and efficiency of PoS.

The Impact of Halving: Lessons from 2024

Bitcoin's fourth halving occurred on April 20, 2024, at block 840,000. The reward was reduced from 6.25 to 3.125 BTC. I've observed all four halvings, and each time the pattern repeats.

Historical Data

First halving (11/28/2012): 50 → 25 BTC

Price before: ~$12, a year later: ~$1000

Second halving (07/09/2016): 25 → 12.5 BTC

Price before: ~$650, cycle peak: $19800

Third halving (05/11/2020): 12.5 → 6.25 BTC

Price before: ~$8600, cycle peak: $69000

Fourth halving (04/20/2024): 6.25 → 3.125 BTC

Price before: ~$64000, October 2025: ~$123000

Halving statistics and historical data can be studied on CoinMarketCap and CoinGecko.

What Changed After the 2024 Halving

Exit of inefficient players: About 20-25% of miners with outdated equipment ceased operations in May-June 2024. The hashrate temporarily dropped but recovered by the end of the year thanks to new efficient ASICs.

Growth in the role of fees: Transaction fees have become critically more important. On peak days (for example, the launch of popular Ordinals collections), fees constitute 30-40% of miners' income versus the historical 5-10%. Fees can be monitored on Mempool.space/graphs.

Industry consolidation: Large public mining companies (Marathon Digital, Riot Platforms, CleanSpark) increased capacity by acquiring assets of bankrupt companies.

The Environmental Question: Facts vs Myths

Criticism of Bitcoin's energy consumption is a favorite topic of the media. Let's analyze objectively.

Real Energy Consumption

According to the Cambridge Bitcoin Electricity Consumption Index, the Bitcoin network consumes about 150-180 TWh per year. For comparison:

All data centers worldwide: ~460 TWh/year
Banking system: ~260 TWh/year
Gold production: ~240 TWh/year
Cooling systems in the USA: ~600 TWh/year

Context matters: Bitcoin serves hundreds of millions of users and processes trillions of dollars in transactions.

According to research, in 2025, about 50-55% of mining operates on renewable energy sources:

Hydropower: ~30%
Solar energy: ~12%
Wind energy: ~8%
Geothermal: ~4%

This is higher than the global economy's average (~29% renewables). Data can be tracked on the Bitcoin Mining Council.

Innovative Use of Energy

Miners are becoming energy grid partners. Companies use associated gas that would otherwise be burned wastefully. In Texas, miners participate in the Demand Response program — shutting down during peak loads to stabilize the grid.

In Finland, heat from mining farms is actively used to heat homes — companies like Hashlabs, Terahash, MARA, and MinersLoop supply heat from water-cooled ASIC miners directly to city pipelines.

According to analysts, Finnish mining companies provide heat to homes for about 140,000 people, which is approximately 2.5% of the country's population.

Practical Guide: How to Start Mining

If after the theory you've decided to try mining, here's a step-by-step plan.

Step 1: Assessing Feasibility

Calculate electricity costs. If you pay more than $0.10/kWh, home mining is likely unprofitable. Check your rate and use calculators like NiceHash Calculator.

Check legislation. In some countries, mining is prohibited or operates in a gray area.

Evaluate conditions. ASIC miners are as loud as a vacuum cleaner (70-80 dB) and generate a lot of heat. You need good cooling and insulation.

Step 2: Choosing Equipment

For Bitcoin: Antminer S21 Pro (234 TH/s), Whatsminer M60 series, or the latest models. Check current models and prices on ASIC Miner Value.

For altcoins: If you want to mine other coins — study specialized ASICs for Litecoin, Kaspa, or other PoW coins.

Step 3: Choosing a Mining Pool

Solo mining Bitcoin with one ASIC is futile. You need a pool. Popular options:

Foundry USA Pool — largest, ~30% hashrate
AntPool — ~18% hashrate
F2Pool — oldest pool with good reputation
Braiins Pool — open-source

Compare pools on MiningPoolStats.

Step 4: Monitoring

Monitor temperature: ASICs should operate at 60-75°C.

Check hashrate: Use the pool's dashboard and compare with stated specifications.

Profitability calculators: Regularly recalculate ROI on WhatToMine considering difficulty growth.

Alternatives to Mining

If mining seems too complicated, there are alternatives:

Staking

If you have Ethereum, Cardano, Polkadot — staking provides 4-12% annually without equipment. Liquid staking through Lido allows you to maintain token liquidity.

DeFi Yield Farming

Providing liquidity in AMM protocols like Uniswap or Curve Finance generates fees from trades plus reward tokens. APY 10-50%+, but there are impermanent loss risks.

DCA Strategy

The simplest strategy: buy a fixed amount of Bitcoin every week/month regardless of price. Statistically, over a long period (3+ years), it outperforms most active traders. Use exchanges like Binance or Kraken with automatic purchase features.

Cloud Mining

Cloud mining is also more relevant than ever, for example from companies like Gomining, where you can earn even without investment.

Mining Risks

Price volatility: If BTC drops by 30%, your daily revenue drops proportionally, and the payback period stretches.

Difficulty growth: Historically, Bitcoin difficulty grows by an average of 3-5% every 2 weeks. Track on BTC.com/stats/diff.

Obsolescence: New generation ASICs appear every 12-18 months with 30-50% efficiency improvements.

Regulatory risks: Governments can suddenly change rules. Follow news on CoinDesk and The Block.

Technical risks: Fires, equipment failures, voltage surges require insurance and safety measures.

The Future of Mining: Trends 2026-2028

Further Institutionalization

Public mining companies already control ~50% of Bitcoin's hashrate. By 2027, this figure could grow to 80%.

Integration with Energy Sector

Miners will become key players in the energy transition, participating in grid balancing and using 100% renewable energy sources.

Technological Breakthroughs

3nm and 2nm chips could improve efficiency by another 40-50%. Immersion cooling is becoming more accessible, increasing equipment lifespan.

Fifth Halving (2028)

The reward will be reduced to 1.5625 BTC. If the price doesn't rise to at least $150,000, many small miners will exit the market. Fees must constitute 40-50% of income to maintain network security.

Common Beginner Mistakes

Underestimating electricity — the main cause of losses. Always calculate net profit.

Buying outdated equipment — cheap old ASICs often operate at a loss.

Ignoring cooling — overheating shortens equipment lifespan.

Wrong pool choice — study reputation and conditions on MiningPoolStats.

Storing coins on the pool — withdraw to your own wallet at least once a week.

Metrics for Monitoring

Hashrate: Blockchain.com/charts/hash-rate
Difficulty: BTC.com/stats/diff
Miner Revenue: Glassnode Studio
On-chain metrics: CryptoQuant
Equipment prices: ASIC Miner Value

FAQ

How does mining work?

Miners solve cryptographic problems by expending electricity and computational power. This creates an economic barrier to network attacks and ensures transaction processing.

Can you make money from mining?

Yes, under the right conditions (cheap electricity <$0.08/kWh, modern equipment), you can achieve 30-50% annual ROI. However, the risks are significant.

What metrics are important for mining?

Hashrate, difficulty, hashprice (income per unit of power), break-even price, miner netflow. Track on specialized platforms like Glassnode and CryptoQuant.

Mining or staking — what to choose?

Depends on capital and technical skills. Mining requires serious investment and technical preparation but is potentially more profitable. Staking is simpler and more accessible but with lower returns.

Where to follow mining news?

On-chain data: Glassnode, CryptoQuant
Statistics: BTC.com, Mempool.space
Calculators: WhatToMine, ASIC Miner Value
News: CoinDesk, The Block, Bitcoin Magazine

Is mining legal in my country?

Check local legislation. In most Western countries, mining is legal but requires tax payments. In some countries (China, Algeria), mining is prohibited.

How does mining affect the environment?

Bitcoin consumes ~150-180 TWh/year, but more than 50% of this energy comes from renewable sources. Miners actively use excess energy and participate in stabilizing electrical grids.

Conclusion

After many years in the crypto industry, one can confidently say: mining remains a critically important component of the crypto ecosystem. Yes, the industry is changing. Yes, the barrier to entry is growing. But the fundamental necessity of mining for Bitcoin is not going anywhere.

Mining is evolving from an enthusiast hobby to a mature industry with professional players and integration into the global energy system. For those considering entering mining: do your homework, calculate the economics three times, consider all risks. But if the numbers add up — mining remains one of the ways to obtain "clean" bitcoin.

Cryptocurrencies need mining because it's the only known system that simultaneously ensures security, decentralization, and censorship resistance without trust in a central authority.

Disclaimer: This article is for educational purposes only and is not financial advice. Cryptocurrency mining involves financial risks. Consult with a professional financial advisor before starting mining.

And to not miss the fundamentals, start with the basics: subscribe to Crypto Academy and get access to the free course "Crypto from Zero to Advanced Investor" → https://academy.gomining.com/courses/bitcoin-and-mining

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October 31, 2025