What is mining? Guide to digging coins for newbies (details)

What is mining? Does it make a lot of money? Why does the hashrate of BTC increase and does it affect the price of BTC?

Above are the questions I often meet from brothers. For me, mining is an interesting topic and it is an integral part of the blockchain's operation.

Even I know a few brothers who have been mining coins everyday, getting rich from mining. In this article, I will answer the questions above.

Mining or mining is the use of mining power to solve the complex algorithms of a coin. This is to create a new block or verify transactions.

In the process of mining, miners did the following:

  • Confirm transactions on the blockchain system.
  • Create a new block (block) to add to the blockchain chain.

For example: On Bitcoin's blockchain system, miners validate the send / receive transaction information between users.

This includes the following information: The number of BTC, the time it takes to receive, the address to, the address ... After confirmation is completed, this information will be put into a block. When that block is full, a new one will be created.

You should refer to what the blockchain article is to understand the nature of blockchain.

Characteristics of mining

Here are some characteristics you need to know before participating in mining:

  • All blockchain using PoW consensus mechanism need mining.
  • People who use their computer power are called miners.
  • Hashrate or hash function is the unit demonstrating the ability of the mining equipment to solve algorithms. The higher the hashrate, the faster the algorithm will perform. Coin digs out as much.
  • Some miners are only optimally digging one (several) coins.
Maybe you are interested in: What is Proof of Work (PoW)? The importance of PoW

The purpose of mining?

To answer this question, I repeat a bit about how blockchain works.

  • In a blockchain system, it is composed of transactions made and recorded information on each block of the blockchain.
  • To be able to record transaction information on a block, that blockchain needs a common consensus mechanism.
  • Some blockchains use a consensus mechanism, PoW. That is, participants need to perform a certain task on the network before being allowed to record that information in the block.
  • These jobs are usually solving an algorithm on a computer. The people who perform this algorithm are called miners. That job is called mining or mining.

As such, the purpose of mining is important, directly involved in the operation of an entire blockchain. Without miners, the blockchain system will not work.

You can review what the Blockchain article is, I have explained very clearly about the PoW algorithm - Proof of Work (Proof of Work) to better understand the purpose of mining.

Maybe you are interested in: What is blockchain? Blockchain handbook for newbies

Where does the profit from mining come from?

This is certainly a question many brothers wonder.

I myself first learned about BTC is also from a friend who is mining coins introduced. At that time, I also wondered if plugging in a computer running 24/7 and earning money, where did that money come from?

As I explained above, mining miners will have to perform two tasks:

  • Confirm the transaction.
  • Create new blocks on the blockchain.

In order to confirm the transaction, the miner will receive a portion of the coins from the "transaction fees" of the transaction fees that the executors pay to the miner.

In addition, when a block is created, that miner will also receive coins from it. This amount of coin is the motivation for miners to plug in and participate in mining daily.

Where to start mining?

To start mining, the first thing you need to do is determine what kind of coin you will mine. From there, consider what machine to buy and how to install it.

In the sections below, I will talk in more detail about the minimum requirements for mining.

Some popular mining coins today are: BTC, ETH, LTC, BCH, XMR, GRIN, BEAM, ZEC ...

Currently, there are two popular forms for brothers to participate in mining:

  • Buy excavators directly, plug in and dig.
  • Use Cloud Mining services - that is, you can rent a miner from a distance, or hire Hashrate to dig.

In this article I will focus on talking about the first way, buying a miner directly to mine. In the following article, I will talk in detail about Cloud Mining.

Digging coins on the computer

A mining rig consists of at least the following basic components:


CPU (Central Processing Unit) or central processing unit. It has the sole task of distributing to VGA graphics cards for excavators. Therefore, it does not need to be too terrible, because it has only one task mentioned above.

However, note that you choose the CPU and the motherboard must match each other.


This is the most important component of a peach buffalo orchard. It is directly involved in mining. The stronger the VGA, the better the ability to dig. This is the component you need to invest most in upgrading.

Of course, VGA must also be suitable for mining certain types of coins. There are two vendors of VGA you may have heard of:

  • NVIDA: 1070, 1060, 1050ti ...
  • AMD: RX 470, RX 580, RX 570 ...

In addition, you should definitely be interested in optimizing mining. Pay attention to what kind of memory chip is built into VGA and how much it can overclock.

For example: Micron's GDDR5X can be overclocked to 700 MHz (Memory Clock), 100 MHz (Core Clock).


No need to invest huge RAM, just enough to combine with the CPU, MainBoard run some basic mining applications.

2G RAM also. Just running the basic window is enough.

Hard Drive

Similar to RAM and CPU, you do not need much investment. To compact, brothers choose SSD hard drive with 80G or 120G memory is enough.


You do not need a huge mainboard investment. However, you should note that it must be fully compatible with VGA & CPU to optimize mining.

Also, if you want to plug in a lot of VGA then choose the number of ports that can be connected.

Memory chip

Attention should be paid to the type of memory chip built into VGA is the type, the ability to overclock up. In the VGA section, I made it clear.


Source is also an important component in the whole rig. It is responsible for providing power to all other operating hardware.

A good power supply will keep both your system stable and long-lasting.


Of course, to mine, you need an internet connection. Network requirements must be stable. There is no need to install a terrible network, because all mining processing is done on your hardware rather than through a continuous online.

This is the basic hardware for you to build when participating in mining. However, there is another kind of miner that I have not mentioned is the specialized machines for mining coins. You just need to plug in the power, plug in the network and participate in digging.

For example, the Antminer S19 + and Antminer S17 + models of Bitmain.

Or A10 ETHMaster (500Mh, 485Mh, 432Mh) of Innosilicon.

I have just introduced to you the hardware components to participate in mining. Below is the software used to participate in mining.

Install software for mining

The most effective mining software

Here are some software that allows you to mine: CGMiner, MultiMiner, BFGMiner, BitMiner, Miner-Server, EasyMiner, AWESOME Miner.

Software memory chip check

Help you check which VGA card your company is using, which way it will know how to overclock accordingly.

For example: GPU - Z.

Software to overclock RAM, VGA

This software allows overclocking RAM and VGA cards. This allows you to optimize your hardware for mining more efficiently.

For example: MSI Afterburner ...


Ethermine is used to check how much coin you have mined, for ETH.


Optional installation or not.

Many of you must know Teamviewer. This software will help you to monitor and manage the device remotely. If there is any arise, you can handle it.


The last article has helped you understand the overview of mining as well as what to prepare to mine. In the next article, I will show you how to calculate profits as well as answer your frequently asked questions.

Hello and see you again in the next article.

About My name is Nguyen Manh Cuong. I was born in a poor village in Ba Vi district, HA NOI province - windy and sunny land. Currently. https://www.nguyendiep.com/. Mr Cuong.
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