Bitcoin has no central bank. Instead, thousands of computers keep one shared ledger. Mining is how new transactions are added and how new coins enter circulation.
The process
- Transactions are collected into a candidate block.
- Miners compete. They run the block’s data through the SHA-256 hash function over and over with a changing number, looking for a result below a target.
- The first valid answer wins. The block is added to the chain and other nodes verify it quickly.
- The winner gets the block reward plus transaction fees. After the April 2024 halving, the reward is 3.125 BTC per block.
Difficulty
The network adjusts the target roughly every two weeks so a block is found about every ten minutes on average. When more machines join, it gets harder.
What it takes
- ASIC hardware built only for this calculation.
- Cheap, large amounts of electricity.
- Cooling and a stable internet connection.
A smartphone cannot compete. Apps that say you earn Bitcoin by tapping a button or running in the background are either games or scams. See what mining simulators are and the scam red flags.
If you want exposure to Bitcoin
Buying it on a regulated exchange is simpler than mining. Prices are volatile, so only use money you can afford to lose. This is general information, not financial advice.