Startup cost
$500–$5k
TRUiC Business Ideas
How to Start a Bitcoin Mining Business
Decision Snapshot
Bitcoin Mining
Idea Score
59
Profit margin
14%
Break-even
4 mo–12 mo
Time to launch
12 wk–36 wk
Demand trend
Stable
5-yr failure rate
—
Capital intensity
Low
Time commitment
Part time
Part 1 - How to start a Bitcoin Mining business - Background
Mining Bitcoin and other cryptocurrencies is the Wild West of technology and finance. The field is still evolving and largely unregulated, and the work comes with risk. As with any frontier, however, there’s significant profit potential for those who succeed.
Although cryptocurrency mining involves the latest in computational and financial advancements, starting a mining business requires no technical knowledge. The work is basically a numbers game, and anyone who’s willing to invest in the resources needed to win the game might profit.
Our guide is in 3 parts:
- Part 1 - How to start a Bitcoin Mining business - Background
- Part 2 - Our planner tool to see if this idea is the right fit for you
- Part 3 - Action plan to get started
What are the costs involved in opening a Bitcoin mining business?
When it first started, Bitcoin could be profitably mined with a home computer. Since 2013, however, mining has become too competitive for computers to provide any real profit. Even the fastest computers aren’t quick enough to find the correct hash first.
Today, Bitcoin mining businesses use application-specific integrated circuits (ASICs) that are specifically made for mining Bitcoin or another cryptocurrency. An ASIC setup that can solve Bitcoin calculations on its own costs about $12,000.
Most people get into the industry for much less by pooling their resources, though. New ASIC miners are available for anywhere from $489 to $3,000. With one of these, business owners can join a mining pool where members literally pool their resources together. When the pool has a correct hash first, the proceeds are split amongst members.
For even less, business owners can mine through the cloud. In these agreements, business owners lease mining resources from a cloud-based provider and the leased resources are pooled with those leased by other business owners. Bitcoin.com has plans starting under $200.
What are the ongoing expenses for a Bitcoin mining business?
The ASICs needed for mining Bitcoin and other cryptocurrencies use a lot of power. One estimate places the amount of power needed to mine Bitcoin at 215 kilowatts per transaction computed. MarketWatch charts how much that costs in each state.
Who is the target market?
A Bitcoin mining business serves the Bitcoin cryptocurrency and therefore, the software used must comply with Bitcoin’s standards. Other cryptocurrency miners must comply with the standards of the cryptocurrency being mined.
How does a Bitcoin mining business make money?
Mining Bitcoin is akin to participating in competitive auditing. Businesses verify Bitcoin transactions by guessing 64-digit hexadecimal numbers, which are referred to as “hashes.” The first business to guess a hash that’s equal to or less than the target hash is awarded Bitcoin and a transaction fee.
Bitcoin is set up so that the number of BItcoin rewarded halves over time. This occurs roughly every four years, and no more Bitcoin will be awarded once there’s a total of 21 million Bitcoin. As the reward for Bitcoin decreases, the amount earned from transaction fees is expected to increase.
(Other cryptocurrencies operate differently.)
How much can you charge customers?
The compensation that Bitcoin mining businesses receive is determined by the cryptocurrency. At the time of writing, having a correct hash first netted the winning business 12.5 Bitcoins. The current exchange rate was just below $8,000 for 1 Bitcoin, so having a hash would net almost $100,000. Transaction fees in comparison are relatively small.
How much profit can a Bitcoin mining business make?
A Bitcoin mining business’ profitability is directly tied to the value of Bitcoin and cost of electricity. When Bitcoin was trading above $20,000 per Bitcoin, this business was highly profitable. As the value of Bitcoin has diminished, so has profitability.
How can you make your business more profitable?
Bitcoin is just one cryptocurrency that business owners can mine. Additional cryptocurrencies include Ethereum, Zcash, Ripple, Monero and others. Which of these is most profitable to mine depends on many factors, including the value, difficulty to mine and projected forecast for each cryptocurrency.
Day-to-Day and Growth
What happens during a typical day at a Bitcoin mining business?
Running a Bitcoin mining business is mostly hands-off work. As long as operations are running smoothly, business owners need to do little more than check their business’ Bitcoin holdings and the current exchange rate to see if they want to sell.
The most common computer malfunction is overheating, and business owners do need to respond quickly when this happens. Computers that overheat shut down, and they won’t provide any profit until they’re cooled down and restarted.
What are some skills and experiences that will help you build a successful Bitcoin mining business?
Mining Bitcoin and other cryptocurrencies requires no specialized knowledge. Nevertheless, business owners should familiarize themselves with the process so they understand what they’re doing. Books, such as, Bitcoin Mining Step by Step, are popular resources on the subject.
Business owners may also want to invest in a USB Bitcoin miner. These usually aren’t profitable, but they’re helpful when learning the fundamentals of Bitcoin mining.
It’s also important to be familiar with the risks that accompany Bitcoin and other cryptocurrencies. Understanding market volatility is essential when deciding whether to sell mined Bitcoin. Being familiar with the illegal scams and hacks that occur helps business owners avoid becoming victims. John Oliver detailed some of the biggest risks, including scams.
What is the growth potential for a Bitcoin mining business?
Bitcoin mining operations run the gamut from individuals doing this as a hobby to large corporations that have vast resources. An example of a small-scale setup is Geoffrey Welborn’s inexpensive, yet profitable, dorm room operation. A business in Sweden has a much larger operation, maintaining 45,000 computers in a former helicopter hangar.
What are some insider tips for jump starting a Bitcoin mining business?
To secure low electric rates, business owners should try to start with as large an operation as they can afford. If a business requires enough electricity to qualify for a reduced commercial rate, the most significant ongoing expense can be greatly reduced. (See Ongoing Expenses.)
How and when to build a team
A Bitcoin mining business can be run with no or minimal staff. If business owners have other obligations, they might want to hire someone who can respond when overheating computers.
Part 2 - Is a Bitcoin Mining business the right fit for you?
Business Evaluation & Strategy Tool
We'll walk you through the four pillars every business needs: Points of Leverage, Marketing Strategy, Financial Model, and Personal Compatibility. At the end you'll see a personalized report and your action plan below will be tailored to your answers.
Step 1 of 4 — Points of Leverage
Every viable business has natural advantages. Below are common leverage points across four categories. Pick the ones that apply to your Bitcoin Mining business. We've pre-suggested a few based on your idea — review and adjust.
Step 2 of 4 — Marketing Strategy
Without a way to connect with customers, even great businesses fail. Pick the channels you plan to use to reach your customers.
Step 3 of 4 — Financial Model
Enter your monthly baseline costs — the minimum overhead to keep the business running. Then we'll calculate how many sales per month you need to break even.
Step 4 of 4 — Personal Compatibility
A business that doesn't fit your life will fail no matter how good the numbers look. Tell us how this business fits you.
Your Bitcoin Mining Evaluation Report
Complete the four pillars and your personalized summary will appear here.
Points of Leverage
Marketing Strategy
Financial Model
Personal Compatibility
Part 3 - Action plan to launch your Bitcoin Mining business in 90 days
Nine concrete steps to take you from idea to open business, grouped into 30-day phases. Complete the planner above and we'll highlight what's most important for your situation.
First 30 days — Foundation
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Form your legal entity
An LLC keeps your personal assets separate from business debts and lawsuits — the most common reason small business owners choose this structure. Sole proprietorships and partnerships do not provide this protection.
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Get an EIN and register for taxes
Apply for your free Employer Identification Number through the IRS, then register for any state or local taxes that apply to your business (sales tax, franchise tax).
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Open a business bank account and credit card
A dedicated business account is required to maintain personal asset protection. Mixing personal and business finances ('piercing the corporate veil') can void your LLC's liability shield.
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Set up business accounting
Recording expenses and income from day one makes tax filing easier and lets you see when the business is actually profitable. Use software (QuickBooks, Wave) or a part-time bookkeeper.
Days 30–60 — Compliance & Risk
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Get permits and licenses
State and local requirements vary widely. Brick-and-mortar businesses typically need a Certificate of Occupancy; service businesses may need specific professional licensing; food businesses need health permits.
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Get business insurance
General Liability Insurance is the most common starting point. If you'll have employees, most states require Workers' Compensation. Specific industries need additional coverage (product liability, professional liability, etc.).
Days 60–90 — Launch
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Define your brand
Your brand is how customers perceive and remember you. A clear name, logo, and visual identity make every later marketing decision easier and protect you legally as you grow.
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Create your business website
Every legitimate business needs a website. Social media pages are not a substitute — you don't own the platform. Modern website builders mean you can launch a clean site in a weekend without a developer.
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Set up your business phone system
A dedicated business number keeps your personal life private, makes the business look legitimate, and lets you route calls professionally. Cloud phone services start under $20/month.