Guide · Mining
How to mine your own cryptocurrency: algorithm, pool and first miners
You can mine your own coin if it uses proof of work. The coin's code does the rest, but a few choices decide whether miners show up and whether your chain stays safe. This guide covers how mining starts at block one, which algorithm to pick, solo mining versus a pool, and how to invite your first miners.
By Sara, Bitcoin writer
Updated · 10 min read
Before we start
Which one sounds like you?
What's inside
6 chapters. Read it start to finish, or jump to the part you need.
- Chapter 1How mining starts at block oneA new chain begins at its genesis block. Miners then race for block one, and the first ones face very little competition.
Chapter 2Difficulty: why blocks keep a steady paceThe network adjusts how hard the puzzle is, so blocks arrive at a steady pace whatever the mining power.
Chapter 3Choosing the mining algorithmThe algorithm decides what hardware mines your coin, and who else can point their machines at it.
Chapter 4Solo mining or a mining pool?Solo miners keep whole rewards but wait a long time for them. A pool trades a small fee for steady payouts.
Chapter 5Getting your first minersMiners join coins they can set up in minutes. Give them everything on one page.
Chapter 6The RocketRPC mining pool add-onPick proof of work in the builder, add the mining pool, and your miners have somewhere to go from day one.
The short answer
The short answer
To mine your own cryptocurrency, launch a proof of work coin, run at least two nodes, and point mining software at them. Choose a mining algorithm that is not shared with a much bigger coin, add a mining pool so small miners can join, and publish clear instructions. Difficulty then adjusts on its own as miners come and go.
- Step 1: Launch a proof of work coinWith its own genesis block and at least two nodes.
- Step 2: Pick the mining algorithmAvoid one that a much bigger coin also uses.
- Step 3: Mine the first blocksSolo at first, with the node and mining software.
- Step 4: Add a mining poolSo small miners earn steady payouts.
- Step 5: Invite minersPublish instructions, the pool address and an explorer.
The first step is easy. The second one is where small coins get into trouble.
1Chapter 1
How mining starts at block one
A new chain begins at its genesis block. Miners then race for block one, and the first ones face very little competition.
Your chain starts with the genesis block, the first block. Mining means finding the next one. A miner keeps hashing a block with different numbers until the result is at or below a target. The first miner to succeed adds the block and earns the block reward.
The Bitcoin Wiki says the main purpose of mining is to set the history of transactions, in a way that is impractical for any one party to change. It also issues new coins and pays fees to miners, which is why people are willing to spend electricity on it.
- Block 1Few miners, big shareEarly on, the people who show up earn most of the new coins. That is a fair way to spread a coin if your community comes in early.
- RiskFew miners, weak chainA chain with little mining power is easy to overpower. Chapter 3 covers why this matters.
- ToolSeparate mining softwareBitcoin Core's built-in miner was removed. Its node can still create blocks on request, but real mining uses separate mining software.
The last point comes from the Bitcoin Core maintainers in issue 14745. A coin forked from Bitcoin or Litecoin inherits this, so plan for external mining software and, soon after, a pool.
2Chapter 2
Difficulty: why blocks keep a steady pace
The network adjusts how hard the puzzle is, so blocks arrive at a steady pace whatever the mining power.
If ten miners join, blocks would arrive faster. If they leave, blocks would crawl. To prevent that, the network changes the difficulty on a schedule. Bitcoin does it every 2,016 blocks.
2,016
Litecoin's settings (3.5 days at 2.5 minutes per block) work out to the same 2,016 blocks, only much faster. Your coin sets its own block time and adjustment window in the same place, so pick a pair that suits your community:
| Bitcoin | Litecoin | |
|---|---|---|
| Target block time | 10 minutes | 2.5 minutes |
| Time between difficulty changes | Two weeks | 3.5 days |
| Blocks between difficulty changes | 2,016 | 2,016 |
| Halving every | 210,000 blocks | 840,000 blocks |
Try your own numbers. The calculator shows how block time, reward and halving interval shape your coin's supply:
Coin supply calculator
How often a new block is found. Shorter means faster payments.
New coins paid to the miner or validator of each block at launch.
The reward is cut in half this often. Use 0 for a reward that never changes.
Coins created at launch before anyone mines. Use 0 for a fair launch.
A hard limit on all coins ever created. Leave empty for no limit.
Coins in existence, by years since launch
| Year | Coins in existence |
|---|---|
| 0 | 0 |
| 5 | 11,820,000 |
| 10 | 17,070,000 |
| 15 | 19,365,000 |
| 20 | 20,345,625 |
| 25 | 20,714,063 |
| 30 | 20,877,656 |
| 35 | 20,949,141 |
| 40 | 20,979,609 |
- After 1 year
- 2,628,000
- After 4 years
- 10,506,000
- Final supply
- 21,000,000
- 99 percent mined by
- Year 27
About 144 blocks a day, 7,200 new coins a day at the starting reward.
Try these rules on a real chain: open the blockchain builderSource
3Chapter 3
Choosing the mining algorithm
The algorithm decides what hardware mines your coin, and who else can point their machines at it.
The mining algorithm is the puzzle itself. Our builder offers three, each tied to a base coin:
| Algorithm | Builder bases | What to know |
|---|---|---|
| SHA-256 | Bitcoin, Bitcoin Cash | Bitcoin's algorithm. Purpose-built ASIC machines for it have existed since 2013, per the Bitcoin Wiki |
| Scrypt | Litecoin, Dogecoin | Used by Litecoin and Dogecoin. Their original coins have large mining communities |
| X11 | Dash | Dash's algorithm. Dash's documentation says X11 ASICs have existed since early 2016 |
The danger of sharing an algorithm
Anyone with hardware for an algorithm can point it at any coin that uses the same one. If a much bigger coin shares your algorithm, its miners can switch to yours in minutes, and they have far more power than your community has.
What lowers the risk:
- Pick an algorithm where your coin can be a real share of the miners, not a rounding error next to a giant.
- Ask exchanges and shops to wait for more confirmations while the chain is young. A confirmation is another block built on top of a payment.
- Build a community of loyal miners early, with a pool, so power stays with you.
- Consider another model. For a small, open coin, proof of stake can be safer. See proof of work vs proof of stake.
4Chapter 4
Solo mining or a mining pool?
Solo miners keep whole rewards but wait a long time for them. A pool trades a small fee for steady payouts.
In solo mining, one miner works alone. When it finds a block, it keeps the whole reward. Until then it earns nothing, and finding a block can take a long time if the chain has many miners.
A mining pool combines the work of many miners. The Bitcoin Wiki explains that miners prove their effort with shares, which are easier proofs of work than a full block, and that the reward is split according to each miner's contribution. The result is a steady trickle of small payouts instead of one rare big one.
| Solo mining | Pool mining | |
|---|---|---|
| Reward when you find a block | All of it | A share of it, based on your shares |
| How often you get paid | Rarely, and unpredictably | Regularly, in small amounts |
| Good for | Testing, and very large miners | Small and medium miners |
| Cost | None | Usually a small pool fee |
| For a new coin | Fine for the first test blocks | Needed to attract regular miners |
How payouts work, simply
Pools use different payout schemes. The simplest to understand is pay per share (PPS): the Bitcoin Wiki describes it as an instant flat payment for each share, from the pool's own balance, which gives miners the least variance because the pool operator carries the risk. Other schemes pay only when a block is actually found. Whichever one you pick, publish it, so miners know what to expect.
5Chapter 5
Getting your first miners
Miners join coins they can set up in minutes. Give them everything on one page.
People who mine for fun or profit look for coins that are simple to start. A short page that answers every question will do more for you than any advert:
What your mining page should include
0 of 7 done
The hardware depends on the algorithm. According to the Bitcoin Wiki, Bitcoin mining moved from CPUs to graphics cards, then to purpose-built ASIC machines, which made graphics card mining financially unviable for Bitcoin. For a coin on an algorithm with ASICs, that is the competition you face. Be honest on your page about what hardware your coin suits.
Also set up the rest of the launch: a website, a supply page and a chat. The complete guide to creating a cryptocurrency walks through day one.
6Chapter 6
The RocketRPC mining pool add-on
Pick proof of work in the builder, add the mining pool, and your miners have somewhere to go from day one.
A coin with its own blockchain starts at $149 one-time. The mining pool is an optional add-on for proof of work coins, for $149 one-time. It lets miners team up on your coin and get paid steadily. Hosting is $5 per server per month after launch, shown in the builder's price box before you pay.
- Start from a proof of work base: Bitcoin, Litecoin, Dogecoin, Bitcoin Cash or Dash.
- Add the mining pool, plus an explorer, so miners can see blocks and verify payouts.
- Set your block time, reward and halving, with the live supply calculator.
Questions people ask
Can I mine my own cryptocurrency?
Yes, if your coin uses proof of work. Launch the chain with at least two nodes, point mining software at them, and mine the first blocks yourself. Then add a pool so other miners can join.
How do I create a mineable coin?
Choose a proof of work base, such as Bitcoin, Litecoin, Dogecoin, Bitcoin Cash or Dash in our builder. Set your block time, reward and supply, and launch. Mining starts at block 1 after the genesis block.
What is solo mining?
Mining on your own. If you find a block you keep the whole reward, but with many miners on the chain that can take a long time. A pool shares the work and the reward.
Do I need a mining pool for my coin?
Not for the very first test blocks, but yes if you want regular miners. A pool turns rare rewards into steady payouts, which small miners need.
Which mining algorithm should my coin use?
Pick one where your coin can be a meaningful share of the miners. If a much bigger coin uses the same algorithm, its miners can point their hardware at yours, as happened to Bitcoin Gold in May 2018.
How does mining difficulty change?
On a schedule. Bitcoin adjusts every 2,016 blocks, which is two weeks at 10 minutes per block. If blocks came too slowly, difficulty goes down. If they came too fast, it goes up.
What happens if all the miners leave my coin?
Blocks slow down until the next difficulty change, and in the worst case stop. Keeping a few loyal miners and a pool running early is the best protection.
Can I mine on a CPU or graphics card?
It depends on the algorithm. On Bitcoin, the Bitcoin Wiki says purpose-built ASIC machines made graphics card mining financially unviable. A coin on an algorithm with no ASICs is more open to ordinary hardware.
Read next
How to create a cryptocurrencyThe complete guide, from coin or token to launch day.
Proof of work vs proof of stakeIs mining the right model for your coin?
What is a genesis block?Where your chain, and your mining, begins.- Create a blockchain with RocketRPCAdd a mining pool and an explorer to your own chain.
Sources
- Bitcoin Wiki, Difficulty, 2016-block adjustment and two weeks
- Bitcoin developer guide, block chain, difficulty adjustment every 2,016 blocks
- Bitcoin Wiki, Mining, purpose of mining and the CPU to GPU to ASIC history
- Bitcoin Wiki, Pooled mining, shares, why pools exist, pay per share
- Bitcoin Wiki, Block hashing algorithm, double SHA-256
- Dash documentation, features, X11 algorithm and ASIC mining
- Bitcoin Core, src/kernel/chainparams.cpp, Bitcoin block time, halving interval and difficulty window
- Litecoin Core, src/chainparams.cpp, Litecoin block time, halving interval and difficulty window
- Bitcoin Core issue 14745, built-in miner removed
- BleepingComputer, Bitcoin Gold double-spend attack (May 2018)