Since Bitcoin Cash is the result of a hard fork of the original Bitcoin blockchain, it runs on the same SHA256 hashing algorithm. That means you can mine Bitcoin Cash using specialised mining rigs called ASICs.
With the right equipment and software, mining Bitcoin Cash is easy and can be done profitably. Most people opt for the higher rewards gained by mining other cryptos such as BTC and ETH, but Bitcoin Cash (BCH) mining is not as competitive.
The Basics of Bitcoin Cash Mining
Crypto mining refers to the process of solving complex cryptographic algorithms to verify new transactions and create new blocks in a blockchain ecosystem. In the case of Bitcoin Cash, this involves verifying BHC transactions and creating new big blocks.
To do this, you need a powerful system capable of crunching the difficult computations required. Even then, only the first node (computer) to solve the problem gets paid for the trouble. Thus, miners with big, powerful, expensive rigs often have the advantage.
Like BTC before its fourth halving, the Bitcoin Cash ecosystem rewards miners with 6.25BCH for each successful new block together with its associated mining fees. You should note that BCH has lower transaction fees by design, thus, miners’ rewards are lower compared to BTC.
How to Start Mining Bitcoin Cash
- Create a Bitcoin Cash wallet
Most crypto exchanges that support Bitcoin Cash, such as Coinbase, will provide a free wallet for you where you can store your Bitcoin Cash after mining.
However, we recommend not storing your BCH on an online wallet for long. To be safe, buy a hardware wallet such as Trezor or Ledger to store the bulk of your crypto assets. There are also some online wallets such as Breadwallet and Exodus that are safer than exchange wallets.
- Get a specialised BCH mining rig
You can either use your computer, an old laptop, or a specialised high-specs rig to mine BCH. You simply need a minimum of 2 GB RAM and a modern processor to get started. To ensure a bigger reward, it’s better to invest in a full node setup.
Given the low rewards that mining BCH brings, CPU and GPU cards may not be efficient or profitable. We recommend investing in an Application Specific Integrated Circuit (ASIC) mining rig and finding a cheap source of power and cooling to keep overheads down.
- Join the right BCH mining pool
Another way of maximising your rewards is by joining a mining pool such as F2pool, Bitmain’s Antminers, and Hashflare.’
Once you set up the mining hardware, all you need to do is download the mining pool’s software stack. That includes a special Windows OS, the node software (including the full blockchain), and the mining pool’s IP address.
Setup will be very easy, and your mining pool will provide specific instructions relating to their operation.
Is Mining Bitcoin Cash Profitable in 2021?
Mining a single block of BCH rewards you with 6.25 BCH, a total of 6.25+0.01039 BCH
($4,179.19) at last check. However, it is highly unlikely that you succeed in getting this reward on a solo operation, and it will usually be shared out when you’re part of a mining pool.
More practically, you can expect to make a few hundred to a few thousand dollars a month before expenses. Power and cooling take a large chunk of these, but more efficient mining rigs and cheap power can guarantee a good passive income.
As always, be sure to carefully weigh out the risk, legal circumstances, and costs associated with Bitcoin Cash mining before you venture out.