What is Bitcoin mining?
Definition · Bitcoin mining
Computers competing to add the next block of transactions to Bitcoin’s blockchain by solving a proof-of-work puzzle. The winner earns newly issued bitcoin plus the block’s transaction fees.
Bitcoin has no bank keeping the books. Thousands of computers hold identical copies of one ledger, the blockchain, and miners are the ones who propose each new page of it. Proposing a page costs real electricity, and the network pays for it in fresh bitcoin.
The name is borrowed from gold. Effort goes in, a scarce thing comes out, on a schedule nobody can speed up. Unlike gold, the total is fixed: 21 million bitcoin, ever.
Why does Bitcoin need miners?
Digital money has a copy problem. What stops someone sending the same coins to two people? Banks answer with a central ledger. Bitcoin answers with mining, and nobody is in charge.
Order
Settles who paid first
Once a transaction is in a block, a second one spending the same coins is invalid.
Cost
Makes history expensive
Each block commits to the one before. Changing an old one means redoing all the work since, faster than everyone else.
Issue
Creates coins by the rules
New bitcoin only appear as block rewards that every node checks. Nobody can print extra.
Satoshi Nakamoto laid this out in the 2008 whitepaper, and the network has made blocks ever since the genesis block on 3 January 2009.
How does Bitcoin mining work, step by step?
- 1
You send bitcoin
Your wallet broadcasts a signed transaction. Nodes check it and park it in the mempool.
- 2
A miner builds a block
It picks waiting transactions, usually the best-paying ones, and adds a coinbase transaction that pays itself the reward.
- 3
It hashes the header
Double SHA-256 over an 80-byte summary of the block. Is the result below the target? Almost never.
- 4
It changes the nonce and tries again
Trillions of times a second, across every miner on Earth.
- 5
Someone wins
They broadcast the block. Everyone else checks it with a single hash, in milliseconds.
- 6
The chain grows
Miners start on the next block. Your transaction now has one confirmation, and each new block adds another.
What a miner actually hashes: 80 bytes
- Version 4 B · rule set
- Previous block hash 32 B · chains blocks together
- Merkle root 32 B · fingerprint of every transaction
- Time 4 B · timestamp
- Target (bits) 4 B · how low the hash must be
- Nonce 4 B · the number miners keep changing
Try it: mine a block in your browser
This is real proof of work, running on your device. Press Mine and your browser tries nonce after nonce until the double SHA-256 hash starts with the number of zeros you picked. Each extra zero makes it about 16 times harder.
Interactive · mine a block in your browser
Real SHA-256d proof of work, simplified header
Block hash (double SHA-256)
Edit the transactions: the hash changes completely with a single letter.
Attempts: 0
Your hashrate: n/a
Time: 0.0 s
Real blocks use a binary 80-byte header and a precise 256-bit target instead of counting zeros. Today’s target is so small that the network needs around 6.0 × 1023 hashes, on average, to find one block.
What is proof of work?
Definition · Proof of work (PoW)
A system where producing a valid result takes a lot of measurable computation, while checking it is cheap. In Bitcoin, the work is finding a block header whose double SHA-256 hash is below the network target.
Adam Back’s Hashcash (1997) used the idea against email spam. Bitcoin used it to let strangers agree on one history. Every block stands for real energy spent, so the chain with the most work is the hardest to fake, and nodes follow that one.
SHA-256 turns any input into a random-looking 256-bit output that changes completely if one bit changes. Bitcoin runs it twice. The header’s nonce is only 32 bits, about 4.3 billion values, which a modern ASIC burns through in a fraction of a second. After that, miners tweak an “extra nonce” in the coinbase transaction (which changes the Merkle root) and start over.
Deep dive: Hash a block yourself in the proof of work guide →
Where do Bitcoin mining rewards come from?
The winning miner gets two things, both paid through the coinbase transaction: the block subsidy of newly created bitcoin (3.125 BTC right now) and the fees of every transaction in the block.
Today’s average block reward: 3.145 BTC
That reward can’t be spent until 100 more blocks are built on top. If two miners find a block at almost the same moment, the network keeps one and the other becomes a stale (orphan) block that earns nothing.
What is the Bitcoin halving?
Definition · Halving
The scheduled 50% cut in the block subsidy every 210,000 blocks, roughly every four years. It’s written into Bitcoin’s rules and is why supply creeps toward 21 million but never passes it.
New bitcoin per block, era by era
Tap a column
4th halving · now
20 Apr 2024
from block 840,000
New BTC per day
≈ 450
3.125 per block, 144 blocks
Mined by era’s end
20.34M
96.9% of 21 million
A halving cuts miners’ income from new coins in half overnight. Miners with pricey power or old machines may switch off, difficulty drops, and those still running get a bigger slice. The subsidy reaches zero around 2140, and from then on fees are the only reward.
| Era | Starts at block | Date | Subsidy |
|---|---|---|---|
| Launch | 0 | 3 Jan 2009 | 50 BTC |
| 1st halving | 210,000 | 28 Nov 2012 | 25 BTC |
| 2nd halving | 420,000 | 9 Jul 2016 | 12.5 BTC |
| 3rd halving | 630,000 | 11 May 2020 | 6.25 BTC |
| 4th halving | 840,000 | 20 Apr 2024 | 3.125 BTC |
| 5th halving | 1,050,000 | ~Apr 2028 (est.) | 1.5625 BTC |
What is mining difficulty?
Definition · Mining difficulty
How hard it is to find a valid block hash. Bitcoin recalculates it every 2,016 blocks (about two weeks) so blocks keep arriving roughly every 10 minutes, however much computing power joins or leaves.
More miners don’t mean more bitcoin. They mean blocks come faster for a while, then difficulty rises and each hash becomes less likely to win. Drag the slider to see it.
What happens when miners join or leave
2,016 blocks take
9.3 days
Difficulty then
×1.50
An unchanged miner earns
×0.67
Simplified: one adjustment, steady hashrate. Real retargets compare the last 2,016 blocks with two weeks and can move difficulty by at most 4× either way.
So what a miner earns depends on their share of the network. Your hashrate divided by the network’s is the fraction of blocks you should expect over time.
What is hashrate?
Definition · Hashrate
How many hashes a miner, or the whole network, computes per second. Written as H/s with metric prefixes: kH/s, MH/s, GH/s, TH/s, PH/s, EH/s, each a thousand times the last.
Hashes per second, each step a thousand times or more
Nobody can see every miner, so network hashrate is estimated from how fast blocks are being found at the current difficulty. Short-term figures are noisy. Need to convert units? Try the hashrate converter.
What hardware is used to mine Bitcoin?
2009 to 2010
CPU
Any computer could mine. Satoshi mined the first blocks on one.
2010 to 2013
GPU
Graphics cards ran many hashes in parallel and made CPUs pointless.
2011 to 2013
FPGA
Reprogrammable chips. More efficient, short-lived.
2013 to today
ASIC
Chips that only do SHA-256. Every generation uses less energy per hash.
An ASIC does one thing, SHA-256, extremely fast, which is why a gaming PC is useless for Bitcoin today. When comparing machines, the number that matters is efficiency in joules per terahash (J/TH). It fell from around 100 J/TH in the mid-2010s to under 20 J/TH on recent machines. Our guide to mining machines compares current models.
What is a mining pool?
Definition · Mining pool
Miners who combine their hashrate and split the rewards of every block any of them finds, in proportion to the work each put in.
Alone, a single ASIC could wait decades for a block. In a pool, it gets paid for “shares”, hashes that meet an easier target set by the pool, which prove how much work it did.
One machine, 30 days
| Payout scheme | How it pays | Who carries the luck |
|---|---|---|
| PPS (pay per share) | A fixed amount per share, blocks found or not | The pool |
| FPPS (full pay per share) | Like PPS, plus a share of average fees | The pool |
| PPLNS (pay per last N shares) | Splits each found block among recent shares | The miners: more variance, often lower fees |
Pools usually take a few percent. A handful of big pools find most blocks, which people rightly worry about, though miners can switch pools any time and pools don’t control their hardware.
Deep dive: Pools and payout schemes, with a variance simulator →
Is Bitcoin mining profitable in 2026?
Revenue depends on your share of the network. Costs are mostly electricity, then hardware, pool fees and cooling. Miners boil revenue down to hashprice: expected earnings per TH/s per day.
Right now that’s about 0.0000004515BTC, or $0.0380 per TH/s per day (live estimate, updated hourly). A machine rated at E J/TH burns E × 24 ÷ 1000 kWh per TH/s per day. Put those together:
Profit per TH/s per day, after electricity
Cheap power and efficient machines win. Industrial miners hunt for power at a few cents per kWh, often surplus or stranded energy. Household rates usually make home mining marginal or a loss. The network also tends to grow, so the same machine earns a little less bitcoin every year. Run your own numbers in the mining profit calculator.
How much energy does Bitcoin mining use?
A lot, on purpose: the cost is what makes the ledger hard to rewrite. The Cambridge Bitcoin Electricity Consumption Index puts yearly use on par with a mid-sized country.
Cost
The criticism
Where the power comes from fossil fuels there’s an environmental cost, and the computation does nothing except secure the network.
Flexible
Miners can move
They can run anywhere and switch off in seconds, so many chase surplus or stranded energy like flared gas or excess hydro, and some sell flexibility back to grids.
J/TH ↓
Machines get better
Each generation needs less energy per hash, though total hashrate, and so total energy, has kept growing.
How can you mine Bitcoin today?
| Option | Upfront | Effort | What you get |
|---|---|---|---|
| ASIC at home | Thousands of dollars, plus power | High | Your own hashrate in a pool you pick |
| Hosted ASIC | Machine plus hosting fees | Medium | Your machine, in someone else’s facility |
| Cloud mining contract | Contract price | Low | Rewards from rented hashrate. Quality varies a lot. |
| Mining app (CloudMineCrypto) | Free; paid plans optional | Very low | BTC mining rewards on your phone from the free plan, ads, games and offers, withdrawable to your own wallet |
| Buy bitcoin | Any amount | Very low | Bitcoin, no mining involved |
Want to run real hardware? Buy a machine. Just want to hold bitcoin? Buying is usually cheaper than mining small amounts. Want to mine without cost or noise? Start with a free app, and add a paid plan later only if you want more speed. Our how to start Bitcoin mining guide has a chooser that weighs these for your situation, and free Bitcoin mining covers the no-cost routes.
Is cloud mining legit? How to spot a scam
Cloud mining means paying someone else for mining rewards instead of running hardware. It’s a fine idea with a lot of bad actors, because customers never see the machines. Check before you pay anyone:
Good signs
- A clear formula tying rewards to hashrate and live network data
- A free or small way to start, and withdrawals you can test
- Plain terms, visible fees and limits, no profit promises
- A long public record you can check, like app-store ratings
Walk away if you see
- Guaranteed, fixed or “daily ROI” returns
- Rewards that depend on recruiting other people
- Withdrawals that suddenly need a “fee” or “tax” first
- Countdown timers and pressure to buy bigger plans
Where we stand: CloudMineCrypto is a mining rewards app you can use for free, with the free plan, ads, games, offers and daily check-ins, and paid plans as an optional add-on. Your rewards come from your plans’ hashrate, any boosts and live network data, using the formula on this page, and you withdraw to your own wallet. Good to know: a plan isn’t ownership of specific hardware, and rewards are estimates, not guaranteed. The reward rules have the details.
Deep dive: Check a cloud mining offer against live hashprice →
What is a 51% attack?
Someone with more than half the network’s hashrate could secretly build a longer chain and publish it, replacing recent blocks. That lets them double-spend their own coins and block transactions. They still couldn’t take coins from other people’s addresses, create coins from nothing or change the rules, because nodes would reject those blocks.
At 1003 EH/s, the hardware and power for that would cost billions, and a successful attack would likely sink the value of the coins the attacker earns. That’s also why merchants wait for several confirmations on big payments.
Bitcoin mining glossary
- ASIC
- A chip built for one task. Bitcoin ASICs only compute SHA-256 hashes.
- Block
- A batch of transactions plus a header, added about every 10 minutes.
- Block reward
- Subsidy (new bitcoin) plus transaction fees, paid to the block’s miner.
- Coinbase transaction
- The first transaction in a block. It pays the miner.
- Confirmation
- Each block added on top of a transaction’s block.
- Difficulty
- How hard it is to find a valid block. Reset every 2,016 blocks.
- Halving
- The 50% cut in subsidy every 210,000 blocks.
- Hashprice
- Expected revenue per unit of hashrate per day, usually per TH/s.
- Hashrate
- Hashes per second. The measure of mining power.
- J/TH
- Joules per terahash: energy efficiency. Lower is better.
- Mempool
- Valid transactions waiting to get into a block.
- Merkle root
- One hash that summarises every transaction in a block.
- Nonce
- A 32-bit number in the header that miners change to get a new hash.
- Orphan (stale) block
- A valid block that lost a near-tie race.
- Pool
- Miners sharing hashrate and rewards.
- Satoshi
- The smallest unit of bitcoin: 0.00000001 BTC.
- Share
- A hash meeting a pool’s easier target, used to count each miner’s work.
- Target
- The 256-bit number a block hash must be below.
Frequently asked questions
What is Bitcoin mining in simple terms?
Computers compete to add the next block of transactions to Bitcoin’s public ledger. The first to find a hash below a target, by pure guessing, wins newly created bitcoin plus the block’s fees.
How long does it take to mine one bitcoin?
The network as a whole makes about 450 BTC a day (144 blocks at 3.125 BTC plus fees). For one person it depends on their share of the network. A single modern ASIC would take many years to collect one bitcoin.
Can I mine Bitcoin on my phone or laptop?
Not profitably. A phone or laptop manages a few million hashes a second, and the network does hundreds of exahashes. Apps like CloudMineCrypto let you mine for free on your phone, with the free plan, ads, games, offers and daily check-ins, without the phone doing the hashing. Rewards are estimates.
Is Bitcoin mining still profitable in 2026?
For operators with cheap power (roughly under 5 to 6 US cents per kWh) and efficient machines, it can be. At typical household rates it often isn’t, once hardware, power and pool fees are counted. The live grid on this page shows today’s margins.
What happens when all 21 million bitcoin are mined?
The subsidy halves every 210,000 blocks and hits zero around 2140. After that, miners earn only transaction fees.
When is the next Bitcoin halving?
At block 1,050,000, when the subsidy drops from 3.125 to 1.5625 BTC. At 10 minutes per block that lands around spring 2028; the exact date depends on how fast blocks come.
Is cloud mining a scam?
Not all of it, but the category has plenty. Guaranteed daily returns, pay-for-recruiting schemes and withdrawals that suddenly need a fee are the classic signs. Good services explain how rewards are worked out, let you start free or small, and let you withdraw.
Is Bitcoin mining legal?
In most countries, yes. Some restrict or ban it, and mining income is usually taxable. Check the rules where you live.
Sources and further reading
- Bitcoin: A Peer-to-Peer Electronic Cash System (the whitepaper) · Satoshi Nakamoto, 2008
- Block chain guide: block headers, proof of work, coinbase · Bitcoin developer documentation
- Mining guide: solo and pool mining · Bitcoin developer documentation
- Difficulty · Bitcoin Wiki
- Controlled supply · Bitcoin Wiki
- Cambridge Bitcoin Electricity Consumption Index · Cambridge Centre for Alternative Finance
- Mining dashboard: hashrate, difficulty, pools · mempool.space
Live figures on this page (network hashrate, block reward, BTC price) come from the CloudMineCrypto API, refreshed hourly, and are labelled where they appear. This guide is educational and not financial advice. CloudMineCrypto is not an investment product; rewards in the app are estimates and aren’t guaranteed.
You’ve read how it works. Now watch it happen.
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