Bitcoin Mining 101
Bitcoin is powered by blockchain, which is the technology behind many cryptocurrencies. A blockchain is a decentralized ledger of all the transactions across a network.
Groups of approved transactions together form a block and are joined by computers within the network (called miners) to create a chain.
Think of it as a long public record that functions almost like a long-running receipt. Bitcoin mining is the process of adding a block to the chain.
Bitcoin miners pick transactions from a group of unconfirmed transactions, called a mempool, to form a block on the blockchain. Before they can add the block securely to the blockchain, miners must solve what’s called a proof-of-work puzzle by guessing a number (also called a nonce). This number is combined with the block’s data and processed through a function called SHA-256.
The ultimate goal: create a block hash, which is a code with enough leading zeros to be less than, or equal to, the network’s target hash. The target hash is what determines how difficult the puzzle is to solve.
Remember the block hash must be less than or equal to the target hash. Think of it like a dice game where the only way to win is if you roll a number smaller than or equal to a some number you’re given at the beginning. That number is made mostly of zeros, so you’d need a really insane and rare roll — a hash with tons of zeros in front of it — to win. In this example, the target hash’s “ffff” represents numbers that are non-zero and the block hash is less than the target hash, therefore solving the puzzle.
If you’re wondering whether this process requires a ton of computational power, you’re right. Miners use extremely powerful computers, called ASICs, to make billions — or trillions — of guesses about which nonces could work.
One computer can cost up to $10,000. ASICs also consume huge amounts of electricity, which has drawn criticism from environmental groups and limits the profitability of miners.
Technically, though, you could mine Bitcoin with, say, a MacBook Pro, but unfortunately you won’t get very far because there’s not enough computing power.
If a miner is able to successfully add a block to the blockchain, they will receive 3.125 bitcoins. The reward amount is cut in half roughly every four years, or every 210,000 blocks. As of mid-June 2025, Bitcoin traded at around $107,000, making 3.125 bitcoins worth $334,375.
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