How Can You Mine Cryptocurrency?

Mining is how new units of cryptocurrency are released into the world, generally in exchange for validating transactions. While it’s theoretically possible for the average person to mine cryptocurrency, it’s increasingly difficult in proof-of-work systems, like Bitcoin.

“As the Bitcoin network grows, it gets more complicated, and more processing power is required,” says Spencer Montgomery, founder of Uinta Crypto Consulting. “The average consumer used to be able to do this, but now it’s just too expensive. There are too many people who have optimized their equipment and technology to outcompete.”

Proof-of-work cryptocurrencies also require huge amounts of energy to mine. For example, Bitcoin mining currently consumes electricity at an annualized rate of 127 terawatt-hours (TWh), which exceeds Norway’s entire annual electricity consumption.

While it’s impractical for the average person to earn crypto by mining in a proof of work system, the proof-of-stake model requires less high-powered computing as validators are chosen randomly based on the amount they stake. It does, however, require that you already own a cryptocurrency to participate. (If you have no crypto, you have nothing to stake.)