What is crypto mining?
Definition · Crypto mining
Using computing power to add blocks to a proof-of-work blockchain. Miners compete to find a valid block; the winner earns newly created coins plus the transaction fees in that block.
Mining does two jobs at once. It puts transactions in order, so nobody can spend the same coin twice. And it’s how new coins come into existence, on a schedule fixed in the code. Bitcoin’s whitepaper set out the idea in 2008, and most mined coins since then copy its basic loop:
- 01
Collect
Gather waiting transactions into a candidate block.
- 02
Guess
Hash the block header with a new number, again and again, until the result is under the target.
- 03
Share
Broadcast the block. Every node checks the answer in a split second.
- 04
Get paid
The winner keeps the new coins and the fees. Everyone starts on the next block.
How does crypto mining work?
The hard part is step two. A hash function turns any input into a fixed-length number that looks random. Change one character and the output changes completely, so there’s no shortcut: a miner can only try a number, hash, check, and try again. The network sets a target, and a block counts only if its hash is below it.
Every so often the network looks at how fast blocks arrived and moves the target. More machines join, the puzzle gets harder; machines leave, it gets easier. That’s difficulty, and it’s why Bitcoin keeps finding a block about every ten minutes whatever the hardware does. Here is Bitcoin right now:
858 EH/s
network hashrate
live, updated hourly
~10 min
average time per block
kept there by difficulty
3.145BTC
average block reward
subsidy plus fees, live
144
blocks a day
on average
Almost nobody mines alone any more. Miners join a pool, which splits each reward by the work members prove, so income comes in small steady amounts instead of a rare jackpot. Solo mining still exists, as a lottery. For the full step-by-step with a real block, see how Bitcoin mining works and proof of work.
Proof of work or proof of stake: why can’t you mine Ethereum?
Both are ways for thousands of computers to agree on one history without trusting each other. Proof of work picks the next block producer by who does the most hashing. Proof of stake picks them by how many coins they’ve locked up, and punishes cheats by destroying part of that stake.
Proof of work
Proof of stake
Who makes the next block
Whoever finds a valid hash first
A validator picked in proportion to stake
What it costs to take part
Machines and electricity
Coins locked up as stake
What stops cheating
Redoing the work would cost a fortune
Cheaters lose part of their stake
Can you mine it?
Yes
No. You stake instead
Examples
Bitcoin, Litecoin, Monero, Kaspa
Ethereum since 2022
Ethereum switched from work to stake in “the Merge” and cut its energy use by about 99.95%.
Ethereum ran on proof of work until the Merge on 15 September 2022. Since then there’s nothing to mine: blocks come from validators with staked ETH. Graphics cards that mined it moved to other coins or went quiet. Try the two systems side by side:
Each person’s chance is their share of the hash power. Everyone pays for electricity on every try; only the winner gets the block reward.
- Ana40% hash power0 blocks
- Ben30% hash power0 blocks
- Chen20% hash power0 blocks
- Dee10% hash power0 blocks
An illustration with made-up people. Either way, over many blocks each person wins about their share. What differs is what they put in: electricity and machines, or locked coins.
Which coins can still be mined?
Any proof-of-work coin. They differ in the hash function they use, the algorithm, and that choice decides which hardware is any good at it. Some were designed to favour ordinary computers; others ended up with machines built just for them.
- Bitcoin SHA-256The biggest proof-of-work network. ASICs only in practice.nonoyes
- Litecoin ScryptScrypt was meant to be memory-hard. Scrypt ASICs exist now.nonoyes
- Dogecoin ScryptMerge-mined with Litecoin since 2014: one Scrypt job, two coins.nonoyes
- Kaspa kHeavyHashDedicated kHeavyHash ASICs, like Bitmain’s KS5, mine it today.nonoyes
- Ethereum Classic EtchashKept proof of work when Ethereum left it. GPUs and ASICs both mine it.noyesyes
- Ravencoin KAWPOWA proof-of-work coin mined on graphics cards.noyesno
- Monero RandomXRandomX is built for ordinary CPUs, to keep ASICs out.yesnono
- Ethereum proof of stakeNo mining since September 2022.
Two coins can share one job. Dogecoin accepts work done for Litecoin, a trick called merged mining that it adopted in 2014, so a Scrypt miner earns both at once. It doesn’t double the work, only the chains it counts for.
CPU, GPU or ASIC: which hardware mines what?
CPU
Your computer’s processor
A generalist. Only competitive on coins built for it, like Monero’s RandomX, which mixes random code and memory work that special chips can’t speed up much.
GPU
A graphics card
Thousands of small cores, good at running one calculation many times. It mined Ethereum until 2022; today it mines coins such as Ravencoin and Ethereum Classic.
ASIC
A chip built for one algorithm
Far faster and more efficient at that one job, useless for anything else. Bitcoin moved to ASICs from 2013, and it’s now the only way to mine it. Current models are compared here.
How far ahead are ASICs? One Antminer S21 XP does 270 TH/s: 270 trillion SHA-256 hashes a second, rated at 3,645 W. The whole Bitcoin network is about 3.2 million of those (live network hashrate). A laptop or a graphics card isn’t on the same chart. That’s why the hero above says no to Bitcoin on anything but an ASIC.
Is crypto mining worth it?
That comes down to one comparison: what the machine earns against what its electricity costs. Earnings move with the coin’s price, its network hashrate and its block reward. Power is the steady cost, and on a household tariff it often wins.
For Bitcoin we have live numbers. At today’s difficulty, one S21 XP in a pool mines about 0.00014257BTC a day (live estimate, before pool fees). The cost to mine one bitcoin turns that into an electricity bill per coin at your power price, and is Bitcoin mining profitable? maps where it pays. For other coins, check a calculator for your exact hardware, and remember the answer changes daily.
Can you mine crypto without buying hardware?
Yes. In the CloudMineCrypto app you mine bitcoin for free: claim the free plan, and add more from ads, games, offers and the daily check-in. Your estimated BTC ticks up while the plans run, and you withdraw to your own wallet over Lightning, Bitcoin on-chain or BNB Smart Chain. No hardware, no noise, no power bill. Paid plans are an optional boost for more speed; they usually mine less than they cost.
Frequently asked questions
What is crypto mining in simple terms?
Computers compete to add the next block of transactions to a blockchain. To win they have to find a number that gives a hash under a target, which takes a huge number of guesses. The winner is paid in newly created coins plus the fees.
How does crypto mining work?
Miners bundle waiting transactions into a block and hash its header over and over with a changing number until the result is small enough. The first valid block is shared, every node checks it in a moment, and the winner gets the block reward. The network adjusts the difficulty so blocks keep a steady pace.
Can you still mine Ethereum?
No. Ethereum switched from proof of work to proof of stake on 15 September 2022, in an upgrade called the Merge. New blocks now come from validators who lock up ETH, not from miners. Ethereum Classic is a separate coin that still uses proof of work.
Can you mine crypto on a phone?
Not on the device itself. Google Play doesn’t allow apps that mine on the phone, and Apple only allows mining done off the device. CloudMineCrypto doesn’t mine on your device: you claim mining plans and your estimated BTC ticks up while they run, worked out from each plan’s hashrate and live network data.
Is crypto mining legal?
It depends on where you live. Many countries allow it, some restrict or ban it, and mining income may be taxable. Check the rules in your country before you start.
What hardware do you need for crypto mining?
It depends on the coin’s algorithm. Bitcoin, Litecoin, Dogecoin and Kaspa are mined with ASICs, machines built for one algorithm. Ethereum Classic and Ravencoin take graphics cards. Monero’s RandomX is designed for ordinary CPUs.
Why is crypto mining so loud?
ASICs turn kilowatts of power into heat, and air-cooled models push it out with fast fans. Makers rate current air-cooled Bitcoin miners at around 75 dB. Hydro and immersion models are quieter but need plumbing or tanks.
Sources and further reading
- Mining guide: solo and pool mining · Bitcoin developer documentation
- The Merge: Ethereum’s move to proof of stake · ethereum.org
- Algorithms and corresponding Antminers (SHA-256, Scrypt, Ethash) · Bitmain support (manufacturer)
- RandomX · Monero (Moneropedia)
- Scrypt proof of work · Litecoin project wiki
- Dogecoin to allow Litecoin merge mining (2014) · CoinDesk
- Kaspa proof-of-work code (kHeavyHash) · Kaspa reference node (GitHub)
- Antminer KS5 and KS5 Pro Kaspa miners · Bitmain (manufacturer)
- Ethereum Classic mining hardware · ethereumclassic.org
- Ravencoin (KAWPOW) · ravencoin.org
- Mining hardware comparison · Bitcoin Wiki
- Developer Program Policy: cryptomining · Google Play
- App Review Guidelines, 3.1.5 cryptocurrencies · Apple
Live figures on this page come from the CloudMineCrypto API or from the public blockchain data services named next to them, refresh on a schedule, and are labelled where they appear. This guide is educational and not financial advice. CloudMineCrypto is not an investment product; rewards in the app are estimates and aren’t guaranteed.
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