What Is Bitcoin Mining? How It Works, Step by Step

Key takeaways

• Bitcoin mining is the competition to add the next block to the chain. It lets a network with no central operator agree on the order of transactions, and it is the only way new bitcoin is issued.
• A miner bundles pending transactions into a candidate block, then hashes the block header again and again, changing a number called the nonce, until the result is at or below the network’s target.
• The winning miner collects the subsidy, 3.125 bitcoin per block as of October 2026, plus the fees in the block. Those new coins cannot be spent for 100 blocks.
• Difficulty is reset every 2,016 blocks to keep blocks about ten minutes apart, and the subsidy halves every 210,000 blocks.
• Miners cannot change the rules, create extra coins or spend other people’s coins, because nodes reject any block that breaks the rules.

What is Bitcoin mining?

Bitcoin mining is the process in which computers compete to add the next block of transactions to Bitcoin’s chain, and the winner is paid in newly issued bitcoin. The name is a metaphor. Nothing is dug up, and the “work” is a guessing game played by specialized machines.

Mining does two jobs at once. It puts transactions into one agreed order without a bank or any other central party deciding, which stops the same coins from being spent twice. It also issues new coins on a fixed schedule, which answers the question “how are bitcoins created?” There is no other route: every new bitcoin comes from the reward in a mined block. How Does Bitcoin Work? shows where mining sits among keys, transactions and nodes.

How does Bitcoin mining work, step by step?

A payment becomes part of the chain in five steps, and mining covers steps 2 to 4.

1. Broadcast. You send a payment. Nodes that find it valid pass it on, and it waits in the mempool, each node’s waiting room for unconfirmed transactions.
2. Assembly. A miner picks transactions from the pool, usually favoring those that pay the most per unit of block space, and builds a candidate block. Its first transaction is special: it creates the miner’s own reward.
3. Hashing and retrying. The miner runs the block’s 80-byte header through the SHA-256 function twice and checks whether the result is at or below the network’s target. If not, it changes the nonce, a number in the header, and tries again. Specialized machines repeat this at enormous speed.
4. Publishing. The first miner whose result meets the target sends the block to the network.
5. Verification. Nodes check every rule and add the valid block to their copy of the chain. Every miner then starts over on top of it, because the header of the next block must contain the new block’s hash.

What is the miner actually guessing?

The miner is guessing numbers until one lands under a target, and trial and error is the only way to do it. Picture a game where each ticket gives you a random number between 1 and 1,000,000, and you win if it is below 1,000. Each ticket has a one-in-a-thousand chance, so you need about a thousand tickets on average. Lower the bar to 500 and the average doubles to two thousand.

Bitcoin works the same way, with two differences. The “random number” is the hash of the block header: the same header always gives the same result, and a tiny change gives an unrelated one, so a new nonce is like drawing a new ticket. And the target is far smaller compared with the range of possible results, so the number of tickets needed is enormous. That target is what the word difficulty describes, and Bitcoin Hash Rate and Mining Difficulty Explained shows how it is set.

Finding a winning ticket takes a huge number of tries, but any node can check one with a single hash.

Why is it called proof of work?

It is called proof of work because a valid block proves that someone spent real computing effort on it, and rewriting history would mean repeating that effort. Each block contains the hash of the block before it. To change an old transaction, an attacker would have to redo the work for that block and for every block after it, while honest miners keep adding new ones.

The deeper a transaction is buried, the more that would cost, which is why recipients of large payments wait for several confirmations. Proof of Work vs Proof of Stake compares this design with the main alternative. Double Spending and 51% Attacks covers what a majority of mining power could do.

How often is a block found?

A block is found about every ten minutes on average, and the difficulty adjustment keeps it that way. Every 2,016 blocks, which is two weeks at the intended pace, each node compares how long those blocks actually took with two weeks and sets a new target. If blocks came too fast, the target is lowered and mining gets harder. If they came too slowly, it is raised.

That is why adding machines does not create more coins. More competition makes each try harder to win, not the reward larger. Because blocks are found by chance, single gaps can be seconds or more than an hour, even though the average holds.

What do miners earn, and how are new bitcoin created?

A miner earns the block subsidy plus the fees of the transactions in its block, and the subsidy is where new bitcoin comes from. The payment arrives in the first transaction of the block, called the coinbase transaction, which spends no earlier coins and simply creates the amount the rules allow.

The subsidy started at 50 bitcoin per block in 2009 and halves every 210,000 blocks, roughly every four years. As of October 2026 it is 3.125 bitcoin, in force since the April 2024 halving. The next halving comes at block 1,050,000, expected around 2028. What Is the Bitcoin Halving? lists the dates, and the Halving and supply explorer shows the schedule for any block height.

Every node checks that a block’s coinbase claims no more than the subsidy plus the fees, and rejects the block if it does. Because the subsidy keeps halving, the total stops just under 21 million, and the last subsidy is due around 2140. How Many Bitcoin Are Left to Mine? explains the cap, and What Happens When the Last Bitcoin Is Mined? covers the time when miners live on fees alone.

Why can’t miners spend new coins right away?

Coins created in a block’s reward can be spent only in a block at least 100 blocks later, which is about 17 hours at the ten-minute pace.

The reason is that two miners sometimes find a block at nearly the same moment, and only one of them stays in the chain. The other block is dropped, and its reward disappears with it. Waiting 100 blocks makes sure nobody has already spent coins that a reorganization could erase. What Is a Bitcoin Block? explains how these temporary splits resolve.

How do ASICs, pools and solo mining fit in?

Mining today is done on ASICs, chips built to do nothing except compute SHA-256 hashes, so an ordinary computer or phone cannot compete. Apps that claim to mine on a phone are usually games, small reward apps or scams, as Bitcoin Mining Apps and Cloud Mining explains. Bitcoin Miners Explained covers the hardware.

Most miners join a pool, which combines their work and splits each reward in proportion to the shares submitted, so a small miner gets a steady trickle instead of a rare jackpot. Bitcoin Mining Pools Explained describes the payout methods.

A solo miner keeps the whole reward but may wait extremely long between wins, as How Long Does It Take to Mine a Bitcoin? shows. Electricity is the largest ongoing cost for most miners, so read Is Bitcoin Mining Profitable? and Bitcoin’s Energy Use before weighing it. Mining as a business carries real financial risk, so talk to a qualified professional before buying equipment.

What can miners not do?

Miners cannot change the rules, create coins beyond the schedule or spend coins that are not theirs, because nodes check every block and reject invalid ones. A block that pays its miner too much, spends a coin without a valid signature or spends the same coin twice is thrown away, and the effort behind it is wasted. What Is a Bitcoin Node? explains why the people running nodes, and not the miners, hold the final say over the rules.

Miners do have some influence. They choose which valid transactions go into their blocks and in what order. A group with a majority of the mining power could also rewrite recent blocks to reverse its own payments, although it could still not take coins it holds no keys for.

New to all this? The Start Here path lists the core guides in order.

Where to go next

• Bitcoin Hash Rate and Mining Difficulty Explained: what hash rate measures and how the target adjusts.
• Inside a Bitcoin Mining Operation: machines, facilities and the economics behind the reward.
• How to Mine Bitcoin at Home: What You Need and What to Expect: a realistic look at small setups.
• What Happens When the Last Bitcoin Is Mined?: the end of the subsidy and the open question behind it.