Beginner Guide

How to Mine Bitcoin: A Plain English Guide for Beginners

By Matt Willemsen, Director of Research. Reviewed by Ben Simpson, Founder of Collective Shift. Updated 5 November 2026. Accurate as of November 2026.

Collective Shift guide cover: How to Mine Bitcoin

Short answer: To mine bitcoin you run specialised computers called ASIC miners that compete to add the next block to the Bitcoin blockchain, usually as part of a mining pool. The winner earns newly created bitcoin plus fees. For most Australians at home, electricity and hardware costs make it hard to cover costs.

Key points

Mining is how new bitcoin is created and how transactions are confirmed, using a system called proof of work.
Modern mining needs purpose built ASIC machines; a laptop or gaming PC is no longer competitive.
Most miners join a pool so they receive smaller, steadier payouts instead of waiting to win a whole block.
Electricity is the biggest ongoing cost, so the price you pay for power decides whether mining can ever cover itself.

What bitcoin mining actually is

Bitcoin has no central bank or company that issues coins or checks payments. Instead, a global network of miners does that job. Miners collect waiting transactions into a block, then race to solve a maths puzzle that is hard to solve and easy to check. The first miner to find a valid answer adds the block to the blockchain and is paid a reward.

That race is called proof of work. It is what makes the Bitcoin ledger expensive to rewrite, because anyone trying to change past blocks would need to redo all of that work faster than the rest of the network combined.

How miners get paid

Each block pays the winning miner a block reward in newly created bitcoin, plus the transaction fees users attached to the transactions inside it. The block reward halves every 210,000 blocks in an event called the halving. Since the April 2024 halving, the reward has been 3.125 bitcoin per block.

The network targets one block about every ten minutes. As more mining power joins, the puzzle gets harder, and as miners leave, it gets easier. This difficulty adjustment means adding more machines to the network does not create bitcoin faster; it just spreads the same rewards across more competitors.

What you need to mine bitcoin

If you want to understand what is involved, these are the building blocks.

An ASIC miner. ASIC stands for application specific integrated circuit. These machines do one job, Bitcoin hashing, far more efficiently than general computers.
Cheap, reliable power. ASICs draw a lot of electricity around the clock, so your power rate matters more than almost anything else.
Cooling and space. Miners run hot and loud, so most people cannot run one comfortably inside a home.
Mining pool software. You point your machine at a pool, which combines many miners and shares rewards based on the work each one contributes.
A bitcoin wallet. Pool payouts go to a wallet address you control.

Solo mining vs pool mining

	Solo mining	Pool mining
How rewards work	You keep the whole block reward if you find a block	Rewards are shared across the pool in proportion to work done
How often you are paid	Very rarely, and possibly never for a small miner	Small, regular payouts
Fees	No pool fee	The pool keeps a fee
Who it suits	Large operations with a lot of hashing power	Almost every individual miner

For a single home miner, the chance of finding a block alone is tiny. That is why nearly all individual miners use a pool, accepting a fee in exchange for steadier income.

Does mining at home make sense in Australia?

For most people, the honest answer is that it is hard to make the numbers work. Large mining companies run thousands of machines on wholesale power, while a home miner pays household electricity rates. On top of power, you need to cover the cost of the machine, which loses value as newer, more efficient models are released, plus noise, heat and maintenance.

Whether a setup could cover its costs depends on your power price, the efficiency of the machine, network difficulty and the bitcoin price, and all four change over time. Online mining calculators can model this, but treat them as rough estimates rather than a promise. We do not publish home mining cost figures for Australia here, because power rates, machine efficiency and network difficulty vary too widely for a single number to be useful.

Risks and things to check first

Cloud mining offers. Many cloud mining schemes promise fixed returns from machines you never see. Treat these with real caution, as this is a common area for scams.
Hardware risk. Machines can fail, and a newer generation can make older ones uneconomic.
Price risk. Mining income is paid in bitcoin, which is volatile, so the value of what you earn can fall.
Tax. The ATO treats mining differently depending on whether it is a hobby or a business. Read the ATO guidance and speak with your accountant before you start.

Alternatives if you just want bitcoin exposure

Many people who look into mining really want to own some bitcoin. Buying it on a registered exchange is far simpler than running hardware, and some Australians use a bitcoin ETF instead. Our guide to bitcoin ETFs vs buying bitcoin directly compares the two, and our bitcoin research hub collects our wider bitcoin research.

Frequently asked questions

Can I mine bitcoin on my laptop or phone?

Technically yes, but it is not competitive. Specialised ASIC machines are so much more efficient that a laptop or phone would use power and wear out hardware with almost no chance of earning anything meaningful.

How long does it take to mine one bitcoin?

There is no fixed answer. A pool miner earns a share of each block the pool finds, so the time depends on how much hashing power you have compared with the whole network, which keeps changing.

Is bitcoin mining legal in Australia?

Bitcoin mining is not banned in Australia. You still need to follow normal rules around electricity, noise and tax, and the ATO has guidance on how mining income is treated.

What happens when all 21 million bitcoin are mined?

Miners will then earn only transaction fees. That point is expected around 2140, because each halving slows the rate of new issuance.

Is cloud mining a good way to start?

Be very careful. Many cloud mining offers are scams or promise returns that are not realistic. Check who runs the service and how it actually works before sending any money.

This guide is general education only and is not personal financial advice. Collective Shift Pty Ltd, ABN 78 650 977 325.

Written by Matt Willemsen, Director of Research, and reviewed by Ben Simpson, Founder of Collective Shift. Published 5 November 2026. Updated 5 November 2026.