Mining

Bitcoin mining is the process of collecting unconfirmed transactions into blocks and competing to add the next block to the chain. Miners check that each transaction follows the rules, then race to meet a difficulty target. The winner earns newly issued bitcoin plus transaction fees. Miners cannot create coins outside the schedule. See Inside a Bitcoin Mining Operation.

Proof of work means a miner must find a number that, combined with the block's contents and run through the SHA-256 hash function, gives an output below a target value. There is no shortcut, only trial and error, but anyone can check an answer with one calculation. That is how the network agrees on one history. See the mining guide.

The halving is a programmed cut to the block subsidy, the newly issued bitcoin paid to miners, that happens every 210,000 blocks, roughly every four years. The subsidy started at 50 bitcoin per block in 2009 and most recently fell to 3.125 in April 2024. It continues until the subsidy reaches zero, around 2140. See Inside a Bitcoin Mining Operation.

Mining uses a lot of electricity because proof of work is deliberately costly: attacking the network would require spending real resources, mostly electricity. Critics point to emissions and local effects, while defenders say miners chase cheap, often underused power. Estimates of the renewable share differ, so check the source and date. See the mining article.

It depends on hardware efficiency, electricity cost, the price of bitcoin and network difficulty, and margins can be thin. Less efficient miners can run at a loss when prices fall or difficulty rises, and mining companies have gone bankrupt in downturns. Mining carries substantial financial risk, so speak with a qualified professional first. See Inside a Bitcoin Mining Operation.