In another story, the Ophir Diggings were named in honor of Finney as he was "one of the first discoverers of that mining locality, and one of the most successful prospectors in that region." Finney "was the best judge of placer ground in Gold Canyon," locating the quartz footwall of the Ophir on 22 February 1858, the placers on Little Gold Hill on 28 January 1859, and the placers below Ophir in 1857.

After the discovery of the Comstock Lode in 1859, the town developed seemingly overnight on the eastern slopes of Mount Davidson, perched at a 6200-foot elevation. Below the town were dug intricate tunnels and shafts for silver mining. The Comstock Lode discovery and subsequent growth of Virginia City was unequaled by the history of other precious metal discoveries. By 1876 Nevada produced over half of all the precious metals in the United States. The Comstock produced silver and gold ore valued at hundreds of thousands of dollars. The wealth supported the Northern cause during the American Civil War and flooded the world monetary markets, resulting in economic changes.

Virginia City's silver ore discoveries were not part of the California Gold Rush, which occurred 10 years before. At the time of the discovery of the Comstock Lode, silver was considered the monetary equal of gold, and all production was purchased by the federal government for use in coinage. In 1873, silver was demonetized by the government, in large part due to the flood of silver into international markets from the silver mines of Virginia City. 

Technical problems plagued the early mining efforts, requiring the development of new mining technology to support the challenge. German engineer Philip Deidesheimer created a timbering system for mining tunnels called square sets, which enabled the retrieval of huge amounts of silver ore in a safe manner. Square set timbering, roots blowers, stamp mills, the Washoe Pan milling process, Cornish pumps, Burleigh machine drills, wire woven rope, miners' safety cages and the safety clutch for those cages; even the Sutro tunnel all had a place in supporting the exploitation of the rich ore body. As technological advancements, these were used many times over in later mining applications. In 1876 one observer reported that in Virginia City, "every activity has to do with the mining, transportation, or reduction of silver ore, or the melting and assaying of silver bullion."

The mining industry dominated Virginia City, making it an industrial center similar to those of the east coast. But the city retained some of its frontier flavor. The social history of the town has emphasized the high number of immigrants among its residents. Miners largely from Cornwall, England, where tin mines had been developed based on hard rock technology, flooded the Comstock. The new English immigrants were one of the largest ethnic groups. Many of the miners who came to the city were Cornish or Irish. In 1870, Asians were 7.6% of the population, primarily Chinese workers who settled in many western towns after they had completed construction of the transcontinental railroad. The Chinese filled niche markets, such as laundry workers and cooks.

Through time, the numerous independent Comstock mines became consolidated under ownership of large monopolies. A group called the Bank Crowd, dominated by William Sharon in Virginia City and William Ralston in San Francisco, financed the mines and mills of the Comstock until they had a virtual monopoly. By manipulating stock through rumors and false reports of mining wealth, some men made fortunes from the stocks of Virginia City's mines. When it appeared the Comstock Lode was finished, the city's population declined sharply, with ten thousand leaving in 1864 and 1865. By the late 1860s, a group of Irish investors threatened the Bank Crowd's control. John Mackay and partner James Fair began as common miners, working their way up to management positions in the mines. By purchasing stock in the mines, they realized financial independence. Their partners Flood and O'Brien stayed in San Francisco and speculated in stock. The Irish Big Four, as the men were called, eventually controlled the Consolidated Virginia mine where the Big Bonanza was discovered in 1873. The next few years were some of the most profitable on the Comstock, as the Bank Crowd lost control to the Irish Big Four. Population reached 25,000 in 1875.

Mining operations were hindered by the extreme temperatures in the mines caused by natural hot springs. In winter the miners would snowshoe to the mines and then have to descend to work in high temperatures. These harsh conditions contributed to a low life expectancy, and earned miners the nickname of Hot Water Plugs. Adolph Sutro built the Sutro Tunnel to drain the hot spring waters to the valley below. But, by the time it was completed in 1879, the mines had substantially passed the intersection level, as their tunnels had been dug ever deeper. 

Great Fire of 1875

Between 1859 and 1875, Virginia City had numerous serious fires. The October 26, 1875 fire, dubbed the Great Fire, caused $12 million in damage. "The spectacle beggars description; the world was on fire...a square mile of roaring flames." When a church caught fire, Mackay was heard to say, "Damn the church! We can build another if we can keep the fire from going down these shafts." Though the Con. Virginia and Ophir hoisting works burned, the fire did not penetrate the Con. Virginia shaft and only reached 400 feet into the Ophir shaft. "Railroad car wheels were melted", "brick buildings went down like paper boxes", and two thousand were left homeless.

In ensuing months the city was rebuilt. A majority of the area now designated as the National Historic Landmark historic district dates to this later time period. However, the bonanza period was at an end by 1880