Just in the past 2 years, we have seen a massive surge in Bitcoin price and the attention it grabbed globally. Bitcoin and other cryptocurrencies trading have become common, popular, and profitable. Other than buying and selling Bitcoin, the other more profitable approach is to mine Bitcoin. But the global trend of mining has made it quite competitive and its associated hardware has become very expensive. So, it seems difficult to make a profit from Bitcoin mining if your investment budget is low. In this blog, we will have a closer look at the possibility of earning profit by starting Bitcoin mining under $100 or less.
Bitcoin Mining Process Explained Easy
Before we dig deeper into the hardware and software needs to mine Bitcoin, let’s have a simple and quick look at the Bitcoin mining process.
Bitcoin mining is a process of verifying Bitcoin-related transactions by creating valid blocks and adding those transaction records to the BTC public ledger, termed as blockchain. The ones holding the computing power and hardware are called miners. Miners have to solve complex mathematical puzzles to validate the transaction and earn the reward. The reward is in the shape of new Bitcoins, which can be earned only if the miner solves the puzzle first. Therefore, miners need a GPU (graphics processing unit) or ASIC (application-specific integrated circuit) to solve the puzzle at super-fast speed and increase their chances of getting the reward.
Bitcoin Mining with $100 or Less
Now that you have a basic idea of what Bitcoin mining is, let’s discuss what you need to start mining and whether it is possible under $100 or less.
Purchase a Bitcoin Mining Rig
The profitability chances from Bitcoin mining are linked with the Bitcoin mining rig (mining hardware) and the power cost. Currently, the Bitcoin mining rigs are very expensive. So, with a budget of $100, the only option left for you is to search and bid for used Bitcoin mining hardware in eBay that is under $100. China’s government has recently made a crackdown on Bitcoin miners in the country, which has left thousands of mining rigs for sale online. So, there are chances that you might get lucky and find a reliable mining rig under the $100 price range.
But first, you should shortlist the ones that are under reasonable price and then explore their profitability ratio by searching about them in Google. Elements like hash rate, power consumption, efficiency, and similar other factors should be thoroughly explored. Besides that, you have to look for such mining hardware that does not ask for hefty shipping charges and comes with a power supply because you don’t want to spend extra money on these things.
Once you have mining hardware, internet, and computing environment, the rest of the requirements are easy to meet and costs negligible.
1. Get a Bitcoin Wallet
After setting up mining hardware, the next thing you have to do is get a Bitcoin wallet. A Bitcoin wallet is where you will receive your Bitcoins and manage your Bitcoin addresses. Every Bitcoin address comprises of two keys, i.e., the public key and the private key. The public key is similar to a bank account number that lets you receive Bitcoins in your wallet. On the other hand, the private key should remain secret, as it is meant to send off transactions. Losing the private key means losing Bitcoins placed in that address.
Bitcoin wallets are of different types, such as software-based online wallets, secure hardware and paper wallets, etc. As a beginner, it is recommended that you opt for a software wallet, such as Exodus.
2. Join Mining Pool
Despite setting up the best mining hardware, it is very difficult to score Bitcoin with just one single machine. It is because you are going to be competing with large mining farms working all across the world, so your single machine is not going to benefit much. This is where mining pools come into action.
In a mining pool, multiple miners give their computing power to the group for a collaborative attempt to verify transactions. Bitcoin rewards earned this way are divided among the members based on the computing power they contributed. Although the income will be low, still it will be continuous. But if you join a mining pool, you have to pay a small fee to the pool operator, which is usually detected from the reward. You can search for the best pool on your own or look through the list provided in Bitcoin Wiki by clicking here.
3. Install Mining Software
The last thing you have to do before beginning your Bitcoin mining journey is to install mining software. A mining software connects you to the Bitcoin and blockchain network. The basic operation of mining software is to provide the work to the miner, deliver the completed work, and add the data to the blockchain. Besides that, it also provides other monitoring statistics, such as hash rate, temperature, mining speed, etc.
There are plenty of free mining software that you can pick from. The one you pick should be easy to use, run on all OS, capable to mine multiple cryptocurrencies, and possess similar other features.
Profitability chances with Bitcoin Mining under $100 Budget
If we had written this blog a year ago, then we could have confidently said that “yes you can make a profitable income from Bitcoin mining under $100 Budget.” But the situation is more complex now. The rapid emergence of large mining farms, expensive but faster mining tools, and complex equations, all have contributed towards making Bitcoin mining more difficult and less profitable via single machines.
If you manage to somehow set up a Bitcoin mining setup under $100, then the electricity cost is another difficulty. On average, US residents pay 0.07 ¢/kWh, which is a high electricity rate in the Bitcoin world. One possible way to turn your $100 Bitcoin mining investment into a profitable one is to look for free electricity. If you manage to purchase a used ASIC miner below $100 and get a free source of electricity, then you can be lucky enough to start earning bucks from mining. Even if you don’t make a profit out of your $100 investment, you will still be learning and experience a lot. This will open up your mind with Bitcoin mining and let you invest more and smartly with a quicker return on investment.
Alternatives to Bitcoin Mining
New technology and new Cryptcurrency has opened an opportunity with Staking instead of Mining. Staking can earn you as much as 80% APY. Be sure to check out our Bitcoin Staking Guide.