How Does Bitcoin Mining Work?

Created by Support Ridgeline Mining, Modified on Tue, Dec 2 at 4:14 PM by Support Ridgeline Mining

What is Mining?

Bitcoin mining is the process of verifying transactions and adding them to the blockchain (learn more about blockchain technology).
Miners use powerful computers to solve complex mathematical puzzles (https://bitcoin.org/bitcoin.pdf) that confirm transactions are legitimate. This work keeps the Bitcoin network secure, accurate, and trustworthy, all without needing banks or central authorities.

Mining Blocks

Transactions on the network are collected into blocks, just like pages in a ledger.
Miners compete to solve a puzzle that allows them to add the next block to the blockchain. The first miner to solve the puzzle wins the right to add the block and shares their solution with the network so all the other miners can verify it’s correct.

Proof-of-Work: Showing You Did the Work

The puzzle that miners solve are called proof-of-work.

The goal of solving these puzzles is to find a hash output below a network-defined target by changing a variable called a nonce. The only way to find a valid hash is through trillions of random guesses. It’s this work that proves the miner invested real energy and computation, and whoever finds a valid hash first earns the right to add the next block of transactions to the blockchain and receives the block reward.

It proves that a miner has put in real computing effort to secure the network. Other nodes on the network can quickly check the solution, ensuring the block is valid. This system prevents fraud and keeps the blockchain tamper-proof.

Earning Bitcoin: The Block Reward

As a reward for their effort, miners receive a block reward, which includes:

Newly created Bitcoin (introducing new coins into circulation). This is currently 3.125 BTC and will decrease by 50% at the next halving event (click HERE to learn more about Halvings)
Transaction fees from the transactions in that block. This reward incentivizes miners to continue contributing computing power, which keeps the network safe and decentralized.

Mining Difficulty: Keeping Things Steady

The Bitcoin network adjusts the difficulty of mining puzzles roughly every two weeks to maintain a steady pace of one new block every 10 minutes.
If more miners join and computing power increases, the puzzles get harder. If miners leave, the puzzles get easier. This keeps the system predictable and stable.

Why Mining Matters

Confirms and records every Bitcoin transaction in a secure way.
Keeps the network decentralized, so no single person or organization controls it.
Introduces new Bitcoin in a fair, transparent way.
Protects the blockchain from tampering or fraud by making it expensive and difficult to attack.