What Is Crypto Mining? How It Works, Hardware and Costs

Crypto mining is the work that keeps a proof-of-work blockchain running. Miners run computers that check pending transactions, bundle them into a block and repeatedly hash that block until the result meets a target set by the network. The miner who finds a valid hash adds the block and receives newly issued coins plus the transaction fees in it.

Today most of this work is done by ASIC miners built for one algorithm, desktop CPUs are still used for Monero, and proof-of-stake coins such as Ethereum cannot be mined at all. This overview covers what mining does, how it differs from staking, which hardware each algorithm uses, pools and the costs to weigh, with links to deeper guides.

What is crypto mining?

A cryptocurrency such as Bitcoin has no bank keeping its ledger. Independent computers hold copies of a shared record, the blockchain, and need a way to agree on which transactions come next. On proof-of-work (PoW) networks, mining is that method. Miners do four things:

• Validate transactions. They check that pending transactions follow the network’s rules, such as no coin being spent twice, and collect them into a candidate block.
• Do the work. They run the block header through the network’s hash function again and again, changing a small field each time, until the output falls below the network’s target. There is no shortcut: it is trial and error at enormous speed.
• Add the block. The first miner to find a valid hash broadcasts the block; other nodes verify it and build on top of it.
• Receive the reward. The winning miner collects newly created coins (the block subsidy) and the fees attached to the transactions in that block. The Bitcoin project describes exactly these two sources: fees paid by users and new bitcoins issued according to a fixed formula.

Because every block costs real computation and electricity, rewriting past blocks would mean redoing that work faster than the rest of the network, which is what makes confirmed history hard to change. For the hash function itself, read SHA-256 explained.

Which cryptocurrencies can be mined?

Not every cryptocurrency can be mined. Proof-of-stake (PoS) networks choose who produces the next block based on coins that participants lock up (“stake”), not on computation, so there is nothing for mining hardware to do. The clearest example is Ethereum: it was mined until The Merge on September 15, 2022, when it completed its transition to proof of stake. Since then, validators produce Ethereum’s blocks.

So the first question for any coin is which method it uses: a proof-of-work coin can be mined, a proof-of-stake coin cannot. Our guide to proof of work vs proof of stake compares the two systems in depth, and our list of which coins you can mine covers every mineable coin by algorithm.

What hardware is used for crypto mining today?

Every proof-of-work coin uses one hashing algorithm, and the right hardware follows from it. There are three broad kinds:

• CPUs, the processors in ordinary computers, can run any algorithm but slowly. They remain a practical choice mainly for Monero. The Monero project describes its RandomX algorithm as optimized for CPUs, with the stated goal of discouraging specialized hardware such as ASICs.
• GPUs, or graphics cards, are also general-purpose. They can switch between algorithms, which has made them a common choice for coins that do not have dedicated hardware.
• ASIC miners (application-specific integrated circuits) are built to run a single algorithm. On that algorithm they do far more work per watt than a CPU or GPU, but they cannot switch to another one. For Bitcoin, the Bitcoin project’s own FAQ says the only cost-effective way to mine today is with specialized hardware.

The table below maps common mineable coins to their algorithm, the hardware type used for them and one example machine from our catalog. Algorithm, coin, hashrate, power and noise are the listed values on each product page.

Coin	Algorithm	Hardware type	Example from our catalog	Listed power and noise	Price*
Bitcoin (BTC)	SHA-256	SHA-256 ASIC	Canaan Avalon Q, 90 TH/s	1,674 W; 45-65 dB (by mode)	$1,291.64
Litecoin (LTC), Dogecoin (DOGE)	Scrypt	Scrypt ASIC	Antminer L9, 16 GH/s	3,360 W; 75 dB	$3,199.00
Kaspa (KAS)	kHeavyHash	kHeavyHash ASIC	IceRiver KS0 Ultra, 400 GH/s	100 W; 35 dB	$112.00
Zcash (ZEC)	Equihash	Equihash ASIC	Antminer Z15 Pro, 840 KSol/s	2,780 W; 75 dB	$1,415.00
Dash (DASH)	X11	X11 ASIC	Antminer D9, 1.77 TH/s	2,839 W; 70 dB	$1,198.00
Monero (XMR)	RandomX	Desktop CPU, or a RandomX ASIC	Antminer X9, 1 MH/s	2,472 W; 76 dB	$5,449.00

*Bitminers price at the time of writing (October 11, 2026). Check the product page for the current price.

Two points stand out:

• An ASIC is locked to its algorithm. A Scrypt machine cannot mine Bitcoin, and a SHA-256 machine cannot mine Kaspa. Choose the coin, then the algorithm, then the machine.
• Hashrate units differ by algorithm (TH/s, GH/s, KSol/s, MH/s), so numbers are only comparable within one algorithm.

Each has its own guide: Scrypt miners explained, how to mine Kaspa, the Zcash mining guide and the Monero mining guide.

Should I mine solo or in a pool?

A single machine competes against the whole network’s hashrate, so on its own it finds blocks rarely or never. Miners choose between two setups:

• Pool mining. Many miners combine their hashrate. The pool gives each miner an easier target than the network’s, and every hash that meets it is submitted as a “share” that proves work was done. When the pool finds a block, it divides the reward according to the shares each miner contributed, minus a pool fee. Payouts are smaller but arrive far more regularly.
• Solo mining. Your hardware works on blocks that pay your own address. If it finds a block, you keep the whole reward and fees; until then you receive nothing. With small hardware this is a long-odds attempt, closer to a lottery ticket than a steady payout.

Read mining pools explained for payout methods and fees, and solo mining pools compared if you want to try for a full block with a home unit.

What does crypto mining cost and what are the risks?

Mining turns electricity into a chance at block rewards: the costs are concrete, the results are not. Weigh these first:

• Electricity. Usually the largest ongoing cost. Multiply a miner’s listed watts by 24 hours to get daily energy use: the Avalon Q’s 1,674 W comes to about 40 kWh per day, before you apply your rate per kWh.
• Heat. Almost every watt a miner draws ends up as heat, so full-size machines need a path to move hot air out.
• Noise. Listed noise in our catalog runs from 35 dB for the smallest units to 75 dB or more for full-size air-cooled machines, which belong in a garage, outbuilding or dedicated facility.
• Difficulty changes. Proof-of-work networks adjust difficulty as total hashrate changes. When more machines join, each machine’s share of the rewards shrinks even though its own hashrate stays the same.
• Coin prices and fees. The value of what a miner receives moves with the market and with transaction fee levels. Current difficulty, network hashrate and coin prices are published daily by block explorers and mining data sites.

To run your own numbers, convert units with the hashrate converter and work through revenue and power cost in our ASIC miner profitability guide. Bitminers does not guarantee mining profitability.

Is crypto mining legal?

In the United States, buying and running mining hardware is legal, but local rules on zoning, noise and electrical work still apply, and taxes matter: IRS guidance treats successfully mined virtual currency as gross income at its fair market value on the date you receive it. Rules differ between states, cities and countries, so check before you set up. Our guide Is Crypto Mining Legal in the US? covers the details.

How do I start crypto mining?

1. Pick a proof-of-work coin and confirm which algorithm it uses.
2. Match hardware to the power you have. Small units run from an adapter on a normal outlet; full-size ASICs draw several thousand watts and usually need a dedicated 240 V circuit.
3. Set up a wallet address you control for payouts, and back up its recovery phrase offline.
4. Choose a pool or a solo pool and create any account it requires.
5. Connect the miner to your network.
6. Enter the pool details. Open the miner’s web interface or app, then enter the pool address and your username.
7. Check that accepted shares appear on the pool dashboard.

For a home setup, the Canaan Avalon Q is a middle step between a desk unit and a data-center machine, rated 110-240 V input, though at 1,674 W it needs a dedicated circuit. Our guide on how to mine Bitcoin walks through every stage, from choosing hardware to entering pool details.

Related guides: How Bitcoin mining works · Mineable coins: what you can still mine · How to mine Bitcoin, step by step

Frequently asked questions

How does crypto mining work in simple terms?

Miners bundle pending transactions into a block and hash it over and over, changing a small value each time, until a result falls below the network’s target. The first to find one adds the block and receives the block subsidy plus fees.

Is crypto mining the same as staking?

No. Mining secures proof-of-work networks with computation and electricity. Staking secures proof-of-stake networks with locked-up coins and needs no mining hardware. A coin uses one method or the other.

Can you still mine Ethereum?

No. Ethereum moved to proof of stake in The Merge on September 15, 2022, and validators now produce its blocks. Etchash hardware is used on Ethereum Classic, which kept proof of work.

Can you mine crypto at home?

Yes, with the right hardware. Small units such as the IceRiver KS0 Ultra list 100 W and 35 dB and run from a normal outlet. Full-size air-cooled ASICs list around 70-76 dB and several thousand watts, so they need a 240 V circuit and a space where that noise and heat are acceptable.