How to Mine Bitcoin Cash: A Comprehensive Guide

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If you are a strong supporter of Bitcoin Cash, there is a way to earn some while also supporting its network: mining.

At its core, mining involves solving complex mathematical puzzles. Miners play a crucial role in any cryptocurrency community. They validate transactions as legitimate and are responsible for releasing new tokens into circulation.

Successful miners are rewarded handsomely for verifying blocks of transactions. In the Bitcoin Cash network, the current reward is 12.5 BCH per block plus all transaction fees included in that block.

Is Bitcoin Cash Mining Profitable?

In recent years, turning a significant profit from Bitcoin Cash mining has required a substantial upfront investment in specialized hardware.

Before making any purchases, however, you can get a rough estimate of your potential earnings using a profitability calculator. To use this tool, you will need to know your hash rate—the speed at which your planned computer setup can calculate hash function outputs. A higher hash rate increases your chances of successfully mining a block.

Tools like a hash rate calculator can help determine your computer's capability, while others, like this one, factor in your specific hardware and local electricity costs.

Is Mining Bitcoin Cash More Profitable Than Mining Bitcoin?

The mining processes for Bitcoin Cash and Bitcoin are very similar, but there are key differences. Most notably, the Bitcoin Cash block size limit is 8MB, compared to Bitcoin's 1MB limit. Larger blocks require more computational power to process, which in turn demands a greater investment from miners. On the upside, larger blocks can include more transactions, leading to higher total fee rewards for the miner.

Both cryptocurrencies currently offer the same block reward—12.5 tokens. However, the market price of each coin is vastly different. This significant price disparity means that to attract miners, the Bitcoin Cash network must maintain a mining difficulty that is substantially lower than Bitcoin's. This is where mechanisms like the Emergency Difficulty Adjustment (EDA) have historically played a role.

When automatic adjustments made Bitcoin Cash less profitable to mine, the EDA was triggered, attracting miners back to the network. Interestingly, data suggested that many miners operated at a loss during these periods, likely due to a strong belief in the Bitcoin Cash project.

According to data from BitInfoCharts, mining Bitcoin Cash has, at times, yielded a slightly higher daily profit per trillion hashes per second (TH/s) compared to Bitcoin, even before considering transaction fees. On average, Bitcoin users have paid significantly higher transaction fees, whereas Bitcoin Cash fees have remained minimal.

How to Start Mining Bitcoin Cash

Once you've assessed the potential investment and returns, and you're still interested, here’s a step-by-step guide to start mining Bitcoin Cash.

First, you will need a Bitcoin Cash wallet to receive your mining rewards. For security, it is highly recommended to use a wallet that stores your private keys on your own device.

Always remember to back up your wallet.dat file to a separate device or keep a printed copy in a secure location. If your computer fails or is stolen without this backup, your funds could be lost forever.

Next, you need to decide whether to mine solo or join a mining pool.

A mining pool is a group of Bitcoin Cash miners who combine their computational power to increase their chances of solving a block and earning the reward. In a pool, your hardware works on smaller, more manageable parts of the overall algorithm. The combined effort of all participants increases the pool's chance of solving the complete puzzle. When the pool earns a reward, it is distributed among participants based on the amount of computing power each contributed.

Solo mining means if you successfully mine a block, you keep the entire 12.5 BCH reward. The catch is that unless you possess an enormous amount of hashing power (which consumes a massive amount of electricity), your chances of ever finding a block alone are extremely slim. Therefore, the vast majority of hobbyist miners choose to join a pool.

When selecting a pool, consider its size, how frequently it finds blocks, its payment structure, the fees it charges, and the statistics it provides to users. To join a pool, you typically need to register on its website and create an account. You will then add a "worker." Each mining machine you run will use this worker ID so the pool can track your contribution.

At this point, you are almost ready to plug in your mining hardware, connect it to your computer, and start.

However, to control and monitor your mining equipment, you need mining software running on your computer. The right software depends on your operating system and the specific mining hardware you own.

If you join a pool, it will often provide its own software. Some pools even offer pre-configured software that includes your wallet address. In such cases, setup can be very straightforward.

For pool mining, you generally just need to enter your username, password, and the pool's address into your mining software. Once configured, you can begin mining. If you are solo mining, rewards will appear in your connected wallet once you find a block. As a pool user, your share of the rewards will be automatically calculated and added to your account, provided you entered your wallet address correctly during registration.

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Bitcoin Cash Mining Hardware

Today, mining is only profitable if you invest in an ASIC (Application-Specific Integrated Circuit) miner—a computer built specifically for mining. Beyond the initial price, you must consider the miner's hash rate and its power consumption. Here is a comparison of some popular ASIC miners:

Bitcoin Cash Mining Software

Many different programs can be used to mine Bitcoin Cash. The two most popular are CGminer and BFGminer, both of which are command-line applications.

If a command-line interface seems too complex, you can use EasyMiner. It acts as a graphical wrapper for CGminer or BFGminer and can be used for both solo and pool mining.

As mentioned earlier, your choice of software will be influenced by your hardware. It's always best to search for programs that are compatible with your specific miner model. Furthermore, if you join a mining pool, they will likely recommend or provide their own dedicated software.

Bitcoin Cash Mining Pools

Some of the largest and most successful Bitcoin Cash mining pools include:

(Note: Always conduct your own research before joining any pool, as policies and reputations can change.)

Cloud Mining

If you want to invest in Bitcoin Cash mining but want to avoid the hassle of managing hardware, cloud mining is an alternative. In simple terms, cloud mining involves renting shared processing power from remote data centers. It greatly simplifies the process because you don't need to buy, set up, or maintain loud and energy-intensive mining hardware.

In theory, you only need to purchase a contract, a computer for communication, and an optional local Bitcoin Cash wallet.

However, cloud mining carries certain risks that investors must be wary of before paying for a contract. The industry has been plagued by numerous scams. Additionally, you have no control over the physical hardware. Finally, your potential profits will be lower because the operator charges fees to cover their operational costs.

Some well-known cloud mining service providers have included Hashflare and Genesis Mining. Platforms like CryptoCompare provide comprehensive lists of cryptocurrency cloud mining contracts to help users determine if a contract is worthwhile.

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Frequently Asked Questions

What is the primary purpose of cryptocurrency mining?
Mining serves two critical functions: it introduces new coins into the system as a reward for miners and secures the network by verifying and adding transactions to the public blockchain ledger. This process prevents double-spending and ensures the integrity of the entire system.

Can I mine Bitcoin Cash with a regular GPU or CPU?
No, mining Bitcoin Cash profitably is not feasible with standard GPUs or CPUs. The network difficulty is far too high, requiring specialized ASIC hardware designed specifically for the SHA-256 algorithm that Bitcoin Cash uses.

How often does the Bitcoin Cash block reward halving occur?
Similar to Bitcoin, the Bitcoin Cash block reward halves approximately every four years. This event reduces the number of new coins generated per block, impacting miner profitability and often serving as a significant market event.

What does 'hash rate' mean?
Hash rate refers to the measuring unit of the computational power used to mine and process transactions on a proof-of-work blockchain. A higher hash rate indicates more power and a greater chance of successfully mining the next block.

Is solo mining a viable option for new miners?
Solo mining is generally not viable for newcomers or those without immense computational resources. The probability of a single miner finding a block is incredibly low, making pool mining the only practical option for most individuals.

What is the biggest ongoing cost associated with mining?
The most significant recurring cost for most miners is electricity. ASIC miners consume large amounts of power, and profitability is highly sensitive to the price you pay per kilowatt-hour (kWh). Always calculate this cost before investing in hardware.