For newcomers to digital currency, this primer explains the mining process that protects the Bitcoin network, the equipment miners use, and whether running this operation can still be profitable today.
What Is Bitcoin Mining Work?
From a system design perspective, specialised participants deploy high computing power to bundle pending transactions and race to publish a new block to the blockchain. Through this computational contest, new coins are issued and recent bitcoin transactions are recorded in the distributed ledger.
By way of metaphor rather than excavation, this activity validates payments and defends the protocol. Competitors assemble a candidate block and attempt to solve a cryptographic puzzle; the first to meet the target adds the block and receives the current block reward of 3.125 BTC (as of 13 June 2025), plus transaction fees.
Under proof of work, the costly effort deters manipulation and coordinates a decentralised set of miners without a central authority. Worldwide participants independently verify the rules and, by consensus, extend the bitcoin blockchain.
In practical terms, mining is vital because it:
- releases new coins at a predictable cadence
- confirms transfers and thwarts double-spend attempts
- keeps network-wide agreement across many nodes
To keep timing stable, mining difficulty retunes roughly every 2,016 blocks (about every two weeks) so a new block arrives close to every ten minutes regardless of total computational power on the network.
Beyond the payout, this mechanism is the security backbone that enables trustless collaboration in a global cryptocurrency system.
Key takeaways
- Validation and recording of crypto transactions happen through this process
- Successful miners are rewarded with new BTC and fees
- Decentralised proof of work drives the mining process
The block reward is the economic payment granted for proposing a valid block of transactions to a blockchain.
Why Blockchain Needs Mining Work
Across the globe, no bank or government coordinates this digital currency; instead, network integrity is maintained through competitive computation that keeps the ledger accurate and tamper-resistant.
Miners deliver three core services:
- Verification of payments — balances and rules are checked before inclusion
- Fraud prevention — permanent recording in a shared ledger prevents double-spending
- Creation of new bitcoins — issuance happens only via proof-of-work blocks
Without this process, the system would lose transparency, security, and trust, and the bitcoin network would not function as intended.
Hashes and Proof of Work
At a high level, a hash functions like a digital fingerprint: a compact code derived from input data. The Bitcoin protocol uses SHA-256 to produce a fixed 64-character hexadecimal string for each input, enabling quick verification without exposing full transaction data.
Hashes matter because they provide:
- Security — change one byte and the block hash becomes unrecognisable
- Consistency — identical input yields the same digest every time
- Efficiency — nodes can validate data rapidly without reprocessing everything
To propose a valid block, a miner must discover a hash beneath the network’s target. The only feasible approach is trial and error: vary a nonce and rehash repeatedly until the output begins with a required run of zeros, which is why vast computational power is used.
Target hash and the nonce: by incrementing a nonce (a throwaway number), machines generate trillions of guesses per second. Once a candidate hash satisfies the threshold, proof of work is demonstrated and the block can be added.
Illustrative example: imagine hashing a short message again and again while appending 1, 2, 3, and so on. Most results won’t qualify; eventually, one will start with a long sequence like 00000000000000000a9c… — that pattern signals a winning attempt under the current difficulty.
How Long to Mine One Bitcoin?
Rather than producing exactly 1 BTC per attempt, results arrive in block-sized payouts:
- Per valid bitcoin block, the reward stands at 3.125 BTC (13 June 2025)
- On average, a new block appears about every ten minutes
- In a mining pool, participants earn proportional shares of rewards
For a solo operator, luck may take months or even years; pooled contributors tend to see smaller but regular distributions.
Solo Mining vs a Mining Pool
Solo approach: using only personal rigs, an individual tries to solve the cryptographic challenge and, if successful, receives the full 3.125 BTC plus fees. Given today’s mining difficulty and required computing power, the probability of finding a block alone is extremely low.
Pool approach: by combining hashrate with others, a group increases the chance that the collective finds a block. When that happens, the block reward is split based on contributed computing power, smoothing income into frequent but smaller payouts.
What You Need to Mine Bitcoin
Hardware: for meaningful performance, ASIC machines (application-specific integrated circuits) eclipse CPUs and GPUs on this workload. Examples include 110 TH/s class — Antminer S19 Pro — and roughly 112 TH/s — WhatsMiner M30S++. Budget expectations often range from about £1,000 up to £5,000+ depending on model, efficiency, and condition.
Mining pools: because success rates for solo setups are tiny, most miners join established pools. Examples with brief traits include global multi-region support — F2Pool, manufacturer-affiliated network — AntPool, and high-uptime, multi-coin infrastructure — ViaBTC.
Is Bitcoin Mining Profitable?
From an economic standpoint, profitability hinges on costs, efficiency, and market price. A miner who proposes a valid block receives the block-level reward plus transaction fees, but reaching that outcome requires serious capital and cheap electricity.
To have a realistic shot at positive returns, consider:
- Efficient ASICs — energy‑frugal hardware wins over time
- Low power rates — electricity price can make or break margins
- Location advantages — cool climates and inexpensive energy help
- Reliable mining pool — steady payouts reduce variance
Illustrative numbers:
- Assume a machine draws around 3,000 W continuously (computational power)
- That equates to roughly 72 kWh per day; at £0.15/kWh that’s a bit over £10/day
- In a 30‑day month, power alone is near £300, excluding hardware and maintenance
If revenue totals about £400 in BTC for the month, the remaining £100 is profit; however, a lower bitcoin price, higher mining difficulty, or outdated rigs can erase that cushion. Many individuals choose to invest in bitcoin directly rather than operate miners.
If buying rather than operating hardware sounds easier, Revolut explains how to buy bitcoin in a few steps.
Block Reward and Halving Timeline
For miners, the primary incentive is the reward tied to each new block. As of 13 June 2025, that payout is 3.125 BTC, and it undergoes a programmed reduction roughly every four years — an event known as a halving — which supports scarcity over time.
Alongside the reward for a block, transaction fees from included payments add to miner income. As the reward halves, fees are expected to play a larger role in sustaining the proof-of-work ecosystem.
Key facts:
- Initial reward in 2009: 50 BTC per bitcoin block
- 2012 halving: reduced to 25 BTC
- 2016 event: lowered to 12.5 BTC
- 2020 change: cut to 6.25 BTC; April 2024: adjusted to 3.125 BTC
How Many Bitcoins Can Be Mined?
Looking at supply mechanics, the maximum issuance is capped at 21 million BTC by protocol rules.
- More than 19.6 million are already in circulation
- The final fraction is expected to be mined near the year 2140
- Halvings occur every 210,000 blocks, approximately every four years
Over the very long term, transaction fees are expected to become the dominant miner revenue stream.
What Is a Pre‑Mined Cryptocurrency?
Unlike Bitcoin’s proof-of-work issuance, some cryptocurrencies allocate a portion — or all — of their supply before launch. Distribution can occur via ICOs, airdrops, or team and ecosystem grants.
Examples include:
- Smart‑contract research chain — Cardano (ADA)
- Banking‑focused payments token — Ripple (XRP)
- Open‑source remittance network — Stellar (XLM)
Pre‑mining can accelerate funding and development, yet it concentrates early control over allocation; by contrast, Bitcoin’s model makes coins earnable through transparent computational work.
What Is a Bitcoin Farm?
Think of a warehouse packed with dedicated rigs running nonstop: that’s an industrial‑scale mining site. Hundreds or thousands of ASICs operate 24/7 to maximise hashrate.
To optimise output, operators pair powerful hardware with inexpensive electricity and robust cooling. Locations with low energy costs and naturally cool climates — for instance, parts of Canada or Iceland — are common choices.
The scale of these facilities raises the bar for small hobbyists, which is why professional operations dominate crypto mining today.
Can Anyone Mine Bitcoin?
In principle, participation is open to all; in practice, success is tough without cheap power, cooling capacity, and modern ASIC equipment. For many beginners, buying or trading the digital currency is simpler than running miners.
The Future of Bitcoin Proof of Work
As halving events shrink rewards, miner income will increasingly depend on transaction fees. Anticipated trends include environmental improvements, policy attention to energy consumption, potential experiments with hybrid approaches at the ecosystem edge, and continued advances in ASIC efficiency.
- Lower‑carbon power and heat‑reuse designs
- Electricity‑use regulations and grid coordination
- Research into complementary consensus tooling
- Next‑generation chips with better joules per terahash
Not all cryptoassets carry identical risk. Before you invest, read our cryptoasset specific risk summaries so you understand how different cryptocurrencies may behave.
