How To Mine Bitcoin Cash
Key Takeaways
- Bitcoin Cash uses a Proof-of-Work consensus mechanism, requiring miners to solve cryptographic puzzles to validate transactions and earn rewards.
- Users can mine Bitcoin Cash with various hardware setups but ASICs are the most effective.
- Joining a mining pool increases the chances of earning steady rewards by combining computational power with other miners.
- Mining profitability depends on electricity costs, hardware costs, hardware efficiency, and Bitcoin Cash’s current market price.
Bitcoin Cash (BCH) is one of the most well-known Bitcoin forks. BCH officially launched in 2017 to address issues with Bitcoin’s scalability. It enables faster transactions and it has lower fees than Bitcoin. Today, BCH has a market cap of over $7 billion.
Since Bitcoin Cash uses the Proof-of-Work consensus mechanism, you can mine it, just like Bitcoin. Mining BCH involves solving complex mathematical problems that validate transactions on the network. As a result, miners are rewarded with Bitcoin Cash coins.
In this article, we’ll explore how you can mine Bitcoin Cash, the necessary hardware, and how you can get started.
Getting Started – The Basics
Proof-of-Work (PoW) Consensus Mechanism
Bitcoin Cash mining operates using the Proof-of-Work consensus mechanism, similar to Bitcoin. With PoW, miners use computational power to solve complex equations. As a result, they validate transactions on the blockchain and get Bitcoin Cash rewards. Finally, just like Bitcoin, BCH uses the SHA-256 algorithm.
Bitcoin Cash Mining Hardware
Mining hardware represents the source of computational power and there are three different options available: CPUs, GPUs, and ASICs.
CPU Miners
A CPU is the central processing unit of your PC. Consequently, it’s often referred to as the heart of a computer.
Pros:
- Lower initial cost.
- Easy setup, ideal for beginners.
Cons:
- Low efficiency and profitability.
- Outdated for competitive mining.
In the early days of Bitcoin Cash, CPU mining was possible but it has since become outdated. The low processing power of CPUs (even modern ones) makes them ineffective compared to more powerful hardware options. Using a CPU to mine BCH is unlikely to result in any significant profits as the cost of power far outweighs the potential rewards.
GPU Miners
Pros:
- More efficient than CPUs.
- Versatile and can be used for other cryptocurrencies.
Cons:
- More expensive than CPUs.
- Higher power consumption.
After the era of CPUs came to an end, miners switched to GPUs as the next best thing. Graphics processing units are more powerful than CPUs but they’re also more expensive and consume a lot more power.
However, Bitcoin Cash uses the SHA-256 algorithm, and GPUs aren’t as efficient as they once were. With the rise of ASIC miners, even GPUs have become obsolete for mining Bitcoin Cash.
ASIC Miners
Pros:
- Extremely powerful and efficient for Bitcoin Cash mining.
- Provides higher hash rates and quicker block-solving.
Cons:
- Expensive upfront costs.
- Dedicated to specific coins, limiting versatility.
ASIC (Application-Specific Integrated Circuit) miners are the best hardware option for Bitcoin Cash mining. Designed specifically for PoW mining, ASICs offer the most power and efficiency, allowing miners to compete in the BCH mining ecosystem.
While ASICs are costly, they provide the highest potential returns. Unlike CPUs and GPUs, ASICs provide positive returns per day.
Software
Mining software is the bridge between the hardware and the blockchain. It enables the mining rig to solve cryptographic puzzles and interact with the Bitcoin Cash network.
Pros:
- Different open-source options.
- Offers performance tracking and optimization features.
Cons:
- Some software requires technical expertise to operate.
- Software compatibility may vary depending on your hardware.
The piece of software you can use depends on the ASIC. One of the most popular options is Awesome Miner.
Bitcoin Cash Mining Pools
If you’re just starting your crypto mining journey, joining a mining pool is highly recommended. Mining pools combine the computational power of thousands of miners to solve blocks faster. At the same time, they distribute the rewards evenly based on the amount of contributed hash power.
Mining pools provide an alternative to solo mining with more frequent rewards. Solo mining can result in greater rewards but successfully adding a block can take months or even years.
Pros:
- Steady, consistent earnings due to pooled resources.
- Easier for smaller miners to participate in mining.
Cons:
- Mining pool fees reduce individual profits.
- Rewards are shared among the pool members.
When it comes to mining pools, the top 3 for Bitcoin Cash are:
- ViaBTC
- Cloverpool
- Antpool
To make the most out of your BCH mining, look for a pool with low fees and a low payout threshold. Consequently, this will allow you to make more frequent withdrawals and get a better ROI.
Cloud Mining
Cloud mining is another option for anyone who doesn’t want to invest in physical hardware. By purchasing a cloud mining contract, you can rent mining power from a data center that mines Bitcoin Cash on your behalf.
Pros:
- No need to buy or maintain hardware.
- No electricity costs.
Cons:
- Lower profit margins due to service fees.
- Some cloud mining services may be unreliable or fraudulent.
Cloud mining isn’t perfect as the overall profits might be lower. Despite that, it’s a viable alternative if you don’t want to deal with hardware and electricity costs. Look for a cloud mining service with a good reputation that has proven itself over the years.
Steps To Mine Bitcoin Cash
Step 1: Buy Hardware
The first step in mining Bitcoin Cash is purchasing the right mining rig. CPUs and GPUs are obsolete, ASIC miners, on the other hand, are the most effective option.
Step 2: Download and Install Software
Once your hardware is set up, the next step is to download mining software. There are several options depending on your hardware, such as CGMiner and BFGMiner for ASICs.
Step 3: Pick A Mining Pool
As a beginner, joining a mining pool is the best way to start earning rewards. Mining pools combine computational power, increasing the chances of solving a block and receiving rewards.
If you prefer, you can opt for solo mining but your chances of earning rewards will be slim. Cloud mining can be used for both solo and pool mining. Overall, mining pools offer more consistent and reliable earnings.
Step 4: Set Up a Wallet
Last but certainly not least, you’ll need a crypto wallet to store your BCH rewards. There are various options such as hardware wallets, mobile wallets, and desktop wallets. Each has its own pros and cons depending on your security and accessibility needs. In conclusion, pick the one that suits you best.
Determining Mining Difficulty – Bitcoin Cash
Mining difficulty refers to how hard it is to solve cryptographic puzzles and add new blocks to the blockchain. The difficulty level fluctuates based on the total computing power of the network. In other words, the more miners join the network, the more the difficulty increases, making it harder to solve blocks. This ensures a stable rate of new BCH entering circulation. You can check the mining difficulty of BCH and see how it has changed historically.
Is Bitcoin Cash Mining Profitable? – Calculator
Mining Bitcoin Cash can be profitable but it largely depends on a couple of factors. These include:
- Electricity costs
- Hardware efficiency
- The current price of BCH
To estimate your earnings, you can use an online mining calculator. Simply enter your hash rate, electricity costs, and pool fee (if pool mining) to get an estimate:
- MinerStat
- WhatToMine
- CoinWarz
Other Crypto You Can Mine
If Bitcoin Cash mining doesn’t seem profitable for your setup, there are several other cryptocurrencies you can mine.
- Bitcoin
- Ethereum
- Solana
- Dogecoin
- Monero
- Litecoin
- Notcoin
- Ravencoin
Bitcoin
Bitcoin is the original cryptocurrency and uses the same Proof-of-Work system as Bitcoin Cash. It also uses the same mining algorithm (SHA-256). This means you can easily switch to BTC from BCH. However, the mining difficulty of Bitcoin is much higher and it requires more powerful hardware to remain competitive. If you are interested in mining Bitcoin, you can learn more about it from our full guide.
Ethereum
Ethereum is no longer mineable but you can still mine Ethereum Classic. It’s the original Ethereum network before the fork and it continues to use PoW. Unlike BTC and BCH, Ethereum mining is still possible with GPU miners, making it more accessible.
Monero
Monero is a coin focused on privacy and censorship resistance. It was designed from the start with ASIC resistance in mind. If you don’t want to invest in an ASIC, you can simply mine Monero with a CPU or a GPU. This is possible due to its mining algorithm, RandomX.
Notcoin
Notcoin is a community-driven token with use cases in many Telegram-based games and applications. It’s among the biggest tokens on the TON network and while you can’t directly mine it, you can obtain it by being active in specific Telegram apps.
Solana
Solana is a smart contract-capable blockchain network that aims to rival the Ethereum network. It offers cost-efficient and fast transactions and users can get a hold of the native SOL through staking or other activities. Mining isn’t possible since Solana uses the Proof-of-Stake consensus mechanism.
Dogecoin
Dogecoin has grown out of its meme roots. In fact, today it has a massive user base. you can mine DOGE with a GPU or an ASIC. GPU mining won’t lead to any significant rewards, leaving ASICs as the best choice.
Litecoin
Litecoin is another well-known cryptocurrency and can be mined using GPUs and ASICs. Moreover, it uses the same mining algorithm as Dogecoin (Scrypt). As a result, you can dual mine Litecoin and Dogecoin with a GPU or ASIC.
Ravencoin
When it comes to crypto mining, mining Ravencoin is one of the classics. Just like Monero, it’s ASIC-resistant. This makes it suitable for GPU miners and, ironically, ASIC miners. GPUs have a lower barrier to entry but the profits will largely depend on your energy costs and Ravencoin’s current price.
Conclusion
Mining Bitcoin Cash can be a rewarding venture if you have the right hardware, software, and setup. With GPU miners being a thing of the past for BCH, ASIC miners are the most effective ones. Cloud mining is also a viable option depending on your resources. In most cases, joining a mining pool is the best way to maximize your chances of earning rewards, especially if you’re just starting. Finally, always remember to factor in electricity costs, hardware efficiency, and market conditions to determine whether mining Bitcoin Cash will be profitable.
FAQs
Is Bitcoin Cash mining profitable?
Profitability depends on electricity costs, hardware efficiency, and BCH’s market price. Use a mining calculator such as WhatToMine or Minerstat to calculate your potential earnings.
Can I mine Bitcoin Cash with a GPU?
You can mine BCH with a GPU but it’s no longer profitable. ASIC miners offer better efficiency and profitability.
What is the best Bitcoin Cash mining pool?
Some popular mining pools for BCH include ViaBTC, Cloverpool, and Antpool.
How much electricity does Bitcoin Cash mining consume?
Electricity consumption depends on the efficiency of your mining hardware. ASIC miners are typically more power-hungry than GPUs but provide a better power-to-earnings ratio.
