Bitcoin mining is the process of securing the network and issuing new Bitcoin, simultaneously. It's not about digging anything up. It's a global computational lottery where the prize is the right to add the next block to the blockchain.
The Problem Mining Solves
If anyone could add blocks to the blockchain freely, the network would be spammed with conflicting transactions and fraudulent history. Bitcoin needs a way to make adding blocks expensive, so that attackers can't cheaply rewrite history, and so that there's a fair, decentralised mechanism for selecting who gets to add the next block.
The solution is Proof of Work.
Proof of Work
To add a valid block, a miner must solve a computational puzzle. The puzzle: find a number (called a nonce) that, when combined with the block's data and hashed with SHA-256, produces a result below a target value. The target starts with a certain number of leading zeros.
SHA256(block data + nonce) = 00000000000000000003a8...The more zeros required at the start, the harder the puzzle.
There is no shortcut. You can't work backwards from the target hash; you have to try billions of nonces per second until you find one that works. This is why mining requires specialised hardware and consumes electricity. The work is real, verifiable, and unforgeable.
When a miner finds the solution, they broadcast the block. Every other node on the network can verify it in milliseconds (hashing once is easy, finding the right nonce is hard). If valid, the block is accepted and the miner earns the reward.
Difficulty Adjustment
Bitcoin is designed to produce one block approximately every 10 minutes. But as more miners join the network, they collectively find solutions faster. To compensate, the network automatically adjusts the difficulty every 2,016 blocks (~two weeks).
If blocks are arriving faster than every 10 minutes, difficulty increases (more leading zeros required). If slower, difficulty decreases. This elegant self-regulating mechanism ensures the 10-minute target holds regardless of whether 1,000 or 1,000,000 miners are competing.
As of early 2026, the network difficulty is approximately 110 trillion, meaning miners collectively produce around 700–900 exahashes per second (EH/s). That's 700,000,000,000,000,000,000 hashes per second, worldwide.
Block Rewards and the Halving
When a miner successfully adds a block, they earn two things:
- The block subsidy: Newly minted Bitcoin. Currently 3.125 BTC per block (post-April 2024 halving)
- Transaction fees: The sum of all fees paid by users whose transactions were included in the block
The block subsidy halves every 210,000 blocks, roughly every four years. This is the halving. It started at 50 BTC in 2009, halved to 25, then 12.5, then 6.25, and now 3.125. By 2140, all 21 million Bitcoin will have been issued, and miners will earn only transaction fees.
ASICs vs GPUs, and Why ASICs Won
Early Bitcoin was mined on ordinary computer CPUs. Then people discovered GPUs (graphics cards) were faster for hashing. Then came FPGAs. Then ASICs. Application-Specific Integrated Circuits, chips designed to do nothing except compute SHA-256 as fast as possible.
A modern ASIC like the chip inside a Bitaxe Gamma can perform over a trillion hashes per second while consuming ~15 watts. A high-end gaming GPU might manage a few hundred megahashes for Bitcoin, 10,000 times slower, for comparable power draw. GPU mining Bitcoin is no longer economically viable. ASICs dominate entirely.
Why Mining Secures the Network
The energy and hardware cost of mining is not waste; it's the point. To rewrite Bitcoin's history (a "51% attack"), an attacker would need to redo more proof-of-work than the honest network has accumulated since the block they want to change. With 700+ EH/s protecting the chain, this would require a multi-billion dollar investment in hardware and energy, just to attempt an attack that honest nodes would likely detect and reject anyway.
Every hash your miner computes is a vote for the honest chain. Home miners contribute to this security directly.