What is Hobby Mining?

What is Hobby Mining?

Robert McDougall 

January 2, 2023


If you have been lurking around the blockchain or crypto industry for some time now, then you would have definitely come across the word mining, through which countless people have made bank and profited quite well. So what is the fuss about? Well, just as the name suggests, mining is the process of mining new blocks of crypto assets that follows the proof-of-work mechanism, where every transaction or block needs to be verified before it can enter the actual blockchain.

For every block mined, miners are paid a fee, and this is how they make money. In other words, the more blocks you mine, the greater the reward will actually be. But the thing to note here is that not every miner has a premium mining rig consisting of high-end hardware, as some miners simply mine with their computers or even a phone, to earn a few dollars. That is where the actual difference between hobby mining and commercial mining comes in. But before we evaluate what a hobby miner is and what commercial mining means, let’s first understand how the mining process works to make it easier for you to understand later terms.

   Key Takeaways

  • Crypto miners provide computational power to verify transactions on the blockchain
  • Hobby mining is for those who occasionally mine crypto as an additional source of income
  • Commercial miners use specialized mining machines that are expensive, but more efficient and powerful
  • Three main types of mining: CPU, GPU, and ASIC
  • You need to declare crypto you mine as taxable income

Crypto mining 101: What is it?

Most of the crypto assets that can be mined in today’s era are based on the POW (proof of work) mechanism, and they also usually have a decentralized system without a third party to organize, manage, or keep track of everything. Due to decentralization, these blockchains require someone else to verify the transactions in order to let them through and reach their destination. That is where the mining process comes in; miners provide their computational power, solve the mathematical problems as fast as their hardware can, verify each transaction, and then let it through.

Do remember that the verification process or mining a single block requires a lot of computational power, allowing more than one miner to work together and confirm the transaction as fast as possible. The faster you verify the transactions, the more you will be able to earn, but you will also require better hardware and components in order to do so.

What is hobby mining, and how does it work?

As I have mentioned above, in order to mine crypto assets, you must have suitable hardware, machines, and components that would help you mine the blocks and verify the transactions. There is a good number of people who do not invest heavily in purchasing dedicated mining machines or high-end components, and they simply mine with their everyday computers, or they simply put their gaming computers to good use.

Well, that type of mining is what we consider hobby mining, as you do it whenever you like, and do not rely solely on it as a proper income stream. If you mine just a few hours a day with your computer or even skip a few days in between, you can proudly call yourself a hobby miner and continue your journey in the crypto industry.

What is commercial or full-fledged mining?

While hobby miners usually use a single mining rig or even use their everyday computers, commercial miners invest heavily in hardware and components to gain as much profit as they can through mining. You might have even seen some miners set up mining farms consisting of hundreds of mining rigs that are solely set up to mine a single crypto asset.

Commercial miners also use dedicated or specialized mining machines that cost a lot but are more efficient and powerful than what a simple computer can provide. In order to understand this aspect clearly, you can take a look below to find out with what components you can start your mining journey.

Different types of mining you should know about

Mining is certainly limited to a specific type of hardware and specialized machines, but there still are a few options that you can explore and see how mining can be done.

CPU Mining

If you are planning to be a hobby miner who mines every now and then, then CPU mining is what you might consider to kick start your mining journey. It does not particularly matter if you have a desktop PC or a laptop; if it has a processor/CPU, you can put it to good use and start mining cryptocurrencies like BTC or ETH. But the thing is, CPU mining is considered the least effective due to the power it generates; thus, the end rewards are lower too. But again, CPU mining can be a good start for a hobby miner without any type of investment.

GPU Mining

This is where things start getting profitable for the miners as GPUs can actually produce high income if you have opted for a latest-gen graphics card. GPU mining can also be considered hobby mining until you have bought several GPUs for the sole purpose of mining. If you are an editor, gamer, or do any type of work that requires a GPU, then you can also start mining on the side and generate some income as a hobby miner. Just make sure to keep the thermals low, or else it will affect the overall life of your graphics card. If not maintained well, your GPU can die within a few months. 

ASIC Mining

ASIC mining rigs are only for commercial miners as they can cost an arm and a leg. They are specialized machines that are designed for the sole purpose of mining and nothing else. They are in a league of their own and are so far ahead what a high-end GPU or even the most powerful computer processor can generate in terms of power. You can read our article on building your own ASIC miner to learn more information.

Is it possible to make a sustainable income with hobby mining?

The simplest and the shortest answer here is no, you cannot make a sustainable income with hobby mining. Yes, you can make enough to buy a meal every now and then, but do not expect to be rich just by mining with your computer or a GPU that you have bought for gaming or other purposes. However, you can do hold onto your mined crypto assets for the long term and hope for them to increase in value to make a considerable profit as a hobby miner.

Do you have to pay tax on your earnings as a hobby miner?

The answer to this question widely depends on the country you live in. There are many countries that have waived crypto tax from its residents, with Portugal being one notable example. However, if you are living in the US, you have to declare your crypto earnings and pay tax on them. The good news is that if you hold onto your crypto assets for over a year, the tax is lowered. Whether you are a hobby miner or a full-fledged miner, you have to declare your crypto assets and pay the taxes.


If you really want to explore the world of blockchain, cryptocurrencies, and digitalization, hobby mining can be a great way to start without investment if you already have a computer. Just make sure to pick a profitable coin to mine that you think has the potential to grow in the future. Even the little you earn today with hobby mining could be worth a lot in the future.

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