Mining
Mining is the work a Proof of Work network uses to check transactions and pack them into blocks. The miner who adds a new block earns a reward in coins.
How it works
Miners run specialized hardware (in Bitcoin these are ASICs, chips built only for mining) and try trillions of guesses to find a block hash that meets the network's target. Whoever finds it first adds the block and earns the reward: newly issued coins plus the fees from the block's transactions. Rewriting past blocks would cost so much that this protects the network.
In Bitcoin a block arrives about every 10 minutes on average. Difficulty adjusts every 2,016 blocks (roughly two weeks): more miners means a harder puzzle. The block reward halves every 210,000 blocks, which is the halving. The April 2024 halving cut it from 6.25 to 3.125 BTC. There will never be more than 21 million bitcoin.
Almost nobody can mine solo, so miners join pools and split rewards by contribution. Income depends on the coin price, difficulty, power cost and hardware cost. Proof of Stake networks, such as Ethereum since 2022, do not use mining.
Someone offers you "cloud mining" with a guaranteed monthly income. That is a red flag. A miner earns based on the block reward, the coin price and the cost of hardware and power, so nobody can guarantee a result.
A hypothetical ASIC draws 3.5 kW and runs 24 hours: that is 84 kWh a day. At 0.08 dollars per kWh, power costs about 6.7 dollars a day. If the machine earns 8 dollars of coins a day, about 1.3 dollars is left, before paying for the hardware. After a halving or a price drop the margin can turn negative.
Do not buy "cloud mining" contracts or "farms" that promise fixed profit: such offers are often Ponzi schemes in disguise. If you are thinking about your own hardware, first calculate power costs and payback at the current difficulty and after the next halving, and only then look at the income.
Questions and answers
What is mining in simple terms?
Computers compete to solve a hard puzzle first and add the next block to the blockchain. The winner earns new coins and the transaction fees.
Can I mine bitcoin on a regular computer?
Technically yes, but it is pointless. Against specialized ASICs your chance of finding a block is close to zero, and you would spend more on power than you earn.
What happens when all bitcoin is mined?
That is expected around the year 2140. After that, miners will earn only transaction fees.
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Updated: 2026-10-19