BEGINNER_DOC_012 // BEGINNERS / MINING
MINING
Mining is the process by which new transactions are confirmed and added to the blockchain.
Miners compete to find a valid block-hash/">block hash by performing billions of computations per second.
The winner earns the block reward — newly issued bitcoin plus all transaction
fees. This is the only mechanism by which new bitcoin enters circulation.
PROOF_OF_WORK — THE_MINING_LOOP
THE MINER'S JOB
1. Collect pending transactions from the mempool
2. Build a candidate block (header + transaction list)
3. Set nonce = 0
4. Hash the block header: SHA256(SHA256(header))
5. Is the result less than the current target?
YES → broadcast the block, claim the reward ✓
NO → increment nonce, try again (billions of times)
~600 EH/s NETWORK WIDE
VALID BLOCK HASH EXAMPLE
0000000000000000000320a7b8eaadde9a6c2eff5d7b04f13dc4d8c4e9cdf3f1
19 leading zeros — each zero roughly quadruples the expected work.
At 600 EH/s, the network makes 600,000,000,000,000,000,000 attempts/second.
BLOCK_REWARD_AND_HALVING
Block Reward Schedule
HALVING
Every 210,000 blocks (~4 years), the block subsidy is cut in half. This is called the halving.
It makes bitcoin's issuance schedule predictable and deflationary.
Epoch 1 (2009–2012): 50 BTC per block
Epoch 2 (2012–2016): 25 BTC per block
Epoch 3 (2016–2020): 12.5 BTC per block
Epoch 4 (2020–2024): 6.25 BTC per block
Epoch 5 (2024–2028): 3.125 BTC per block ← current
...
~2140: 0 BTC subsidy (miners paid fees only)
Total supply cap: 21,000,000 BTC (never more)
After the last halving (~2140), miners will rely entirely on transaction fees for revenue. This transition is a known open research area in Bitcoin economics.
MINING_HARDWARE_EVOLUTION
From CPUs to ASICs
HARDWARE
Mining hardware has evolved through four generations as the difficulty has grown.
Only purpose-built ASICs are economically viable today.
2009: CPU mining — any laptop could mine a block
2010: GPU mining — graphics cards 100× more efficient
2011: FPGA mining — programmable chips, 10× over GPUs
2013: ASIC mining — application-specific chips, 1000× over FPGAs
Modern ASIC (Antminer S21 XP, 2024):
Hashrate: 270 TH/s
Power: 3,510W
Efficiency: 13 J/TH
KEY_FACTS
Block reward (2024)
3.125 BTC + fees
Halving interval
210,000 blocks (~4 years)
Network hashrate (2024)
~600 EH/s
Coinbase maturity
100 blocks (before spendable)
Total supply cap
21,000,000 BTC
TERMINOLOGY_INDEX
Proof of Work
The computation miners do to find a valid block hash. Provides security through energy expenditure.
Nonce
A 4-byte field in the block header that miners increment to change the hash output.
Block Reward
The subsidy (newly created BTC) plus transaction fees paid to the miner who finds a valid block.
Halving
The event every 210,000 blocks that cuts the block subsidy in half.
Coinbase Tx
The first transaction in every block. Has no inputs — it creates new bitcoin for the miner.
Mining Pool
A group of miners combining hashrate to find blocks more consistently and share rewards proportionally.
ASIC
Application-Specific Integrated Circuit. Hardware built solely to compute SHA256d hashes for Bitcoin mining.