Mining

What is Bitcoin Mining?

When you send bitcoin, your transaction does not confirm itself. Miners gather pending transactions, verify they follow the protocol rules, and bundle them into a new block that gets permanently added to the blockchain. In return, miners earn freshly created bitcoin plus the fees attached to the transactions they include.

Thousands of independent miners around the world compete to build each block. No single company or government controls who can mine. You can start mining with the right hardware, and no one needs to approve your participation.

Why It Matters

Every ten minutes or so, miners spend real electricity solving a computational puzzle. The winner publishes the next block, and the rest of the network verifies it. If any transaction breaks the rules, other nodes reject the block. This cycle of work and verification prevents double-spending and makes rewriting past transactions prohibitively expensive.

Mining is the only way new bitcoin enters circulation. Every bitcoin that exists was earned by a miner who contributed processing power. The block reward started at 50 BTC in 2009 and gets cut in half roughly every four years through an event called the halving. As of 2024, miners earn 3.125 BTC per block. You can verify the issuance schedule in Bitcoin's source code, and no one can alter it.

The total computing power dedicated to mining is called the hash rate. When the hash rate rises, more miners are competing, and an attacker would need more resources to overpower the network. You can track mining power in real time on Bitcoin Pulse.

How It Works

When you broadcast a Bitcoin transaction, it lands in a waiting area called the mempool. Miners pick transactions from this pool, usually prioritizing those with higher fees, and assemble them into a candidate block. Each candidate block includes a reference to the previous block (linking the chain) and a special number called a nonce.

The miner's goal is to find a nonce that, combined with the rest of the block data and run through the SHA-256 hashing algorithm, produces an output below a target value. No shortcut exists. Miners try billions of nonces per second until one works. That brute-force guessing is the "work" in Proof of Work, and it consumes real electricity and hardware.

Once a miner finds a valid hash, they broadcast the completed block. Other nodes verify it within seconds, accept it, and begin building on top of it. The winning miner collects the block reward plus all transaction fees through a special "coinbase" transaction at the top of the block. Every 2,016 blocks (roughly two weeks), the protocol adjusts the puzzle difficulty so that blocks continue to arrive approximately every ten minutes, regardless of how many miners are competing.