Mining

The process of competing to add new blocks to the Bitcoin blockchain. Miners earn block rewards plus fees.

Mining is the process by which new Bitcoin blocks are added to the blockchain. Miners run computers that compete to solve a computationally hard puzzle — finding a hash with enough leading zeros to satisfy the current difficulty target. The first to find one broadcasts their block, gets it accepted by the network, and earns the block reward (newly minted sats) plus the transaction fees in the block.

Mining serves two functions. Economically, it secures the network — the cost of attacking Bitcoin scales with the global mining hashrate. Monetarily, it issues new sats according to a fixed schedule that halves every four years until the 21 million cap is reached around 2140.

For individual users, mining is no longer profitable at residential electricity prices — industrial-scale operations dominate. But understanding what miners do is essential to understanding why Bitcoin works and why its energy use is a feature rather than a bug.

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Course topic

Mining & nodes

How Bitcoin actually works. Miners, nodes, blocks, and what running your own changes.

Related terms

Glossary

Block

A bundle of Bitcoin transactions added to the blockchain roughly every ten minutes.

Glossary

Hash

A fixed-length fingerprint of arbitrary data. Bitcoin uses SHA-256 hashes for everything from block IDs to addresses.

Glossary

Halving

A pre-programmed event every four years where the Bitcoin issuance rate drops by 50%.

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