What is Bitcoin mining and how does mining work?

Bitcoin mining is the process that keeps the Bitcoin network secure and decentralised. In this beginner's guide, we walk through how bitcoin mining works, what equipment's required, and whether it’s still profitable today.

What is bitcoin mining?

Bitcoin mining is the foundational process that enables the Bitcoin network to remain secure, decentralised, and unhackable. It refers to the computational work performed by miners — specialised participants who use powerful hardware to solve complex mathematical puzzles. The outcome of this process is twofold: new bitcoins are issued into circulation and recent transactions are added to the blockchain.

The term 'mining' is metaphorical. Unlike traditional mining, which extracts physical resources like gold, bitcoin mining involves validating digital transactions and safeguarding the system. Miners group transactions into blocks and compete to solve a cryptographic challenge. The first one to succeed gets to add their block to the chain and earns a reward — currently 3.125 BTC (as of June 13, 2025).

This system is built on the principle of proof of work. The work is hard to do because it's meant to stop people from manipulating and be fair. Because the network is decentralised, no single entity controls it. Instead, miners around the world collectively enforce the rules by agreeing on the state of the blockchain.

Mining is essential in several ways:

• Introduces new bitcoins into the system at a controlled rate
• Confirms transactions and prevents double-spending
• Maintains consensus across a distributed network

The difficulty of mining adjusts approximately every two weeks, ensuring that blocks are added roughly every ten minutes, regardless of how many miners are active. As more miners join, the puzzles become harder — if they leave, the difficulty reduces.

Bitcoin mining isn’t just about earning BTC. It’s a pillar of the network’s architecture — the mechanism that enables trustless cooperation in a global financial ecosystem.

Key takeaways

• Mining validates and records crypto transactions
• Miners receive block rewards in bitcoin
• Mining is powered by decentralised computing (proof of work)

A block reward is a financial incentive given to cryptocurrency miners for validating blocks of transactions on a blockchain.

Why mining is needed

Bitcoin is a decentralised system, which means it doesn’t rely on any single authority, like a bank or government, to manage transactions. Instead, it uses mining — a process where thousands of computers around the world work together to keep the network secure and up to date.

Miners are essential because they perform three critical functions:

• Verify transactions: when someone sends bitcoin, miners check that the sender has enough funds and that the transaction follows the rules
• Prevent fraud: without mining, people could try to spend the same bitcoin twice (called double-spending). Mining makes this virtually impossible by recording each transaction permanently in a shared ledger
• Issue new coins: mining is the only way to create new bitcoins. This keeps the supply limited and predictable

Without miners, the Bitcoin network simply wouldn’t function. They provide the trust, transparency, and security that allow bitcoin to exist without central oversight.

Understanding hashes

A hash is like a fingerprint — a unique digital code generated from input data. In bitcoin mining, hashes are used to represent all the data in a block in a compact, secure way. Bitcoin uses a specific algorithm called SHA-256 (Secure Hash Algorithm 256-bit), which always produces a 64-character string of letters and numbers.

Here’s why hashes matter:

• Security: hashes make it nearly impossible to change transaction data without it being noticed. If you alter just one piece of data in a block, the entire hash changes
• Consistency: the same input always produces the same hash. But even a tiny change in input, like one letter, will result in a completely different hash
• Efficiency: hashes help the network verify data quickly without needing to store or process all the original information again

To successfully mine a block, miners must generate a hash that begins with a certain number of zeros. The only way to do this is by changing a small part of the input — called the nonce — and trying again. This is what makes mining computationally intensive. Miners may have to try trillions of different nonces before they hit on a hash that works.

You can think of it like playing a massive guessing game. The winning hash meets strict rules set by the network, and finding it proves that the miner has done the required work. This is what makes bitcoin secure — it’s backed by the computing power of thousands of miners competing to find valid hashes.

Target hash and the nonce

The nonce is a random number miners adjust to find a valid hash. Each attempt is a new guess. Since the process is random, high-powered machines try trillions of combinations per second until one fits the criteria.

Hash example

Let’s walk through a basic hash example to show how mining actually works in practice.

Imagine you’re trying to find a hash for the phrase “Hello, world!”. You run it through a SHA-256 generator and get this result:

a591a6d40bf420404a011733cfb7b190d62c65bf0bcda32b57b277d9ad9f146e

That’s a valid hash, but it doesn’t start with the required number of zeros to be accepted by the Bitcoin network. So, miners tweak a small part of the input called the nonce — maybe adding a “1” at the end — and try again:

Hello, world!1 → 7d793037a0760186574b0282f2f435e7e3cbb6dd43b9b1eae43ad6fdab6aaed2

Still no good. They keep adjusting and re-hashing:

Hello, world!2 → 3e23e8160039594a33894f6564e1b1348bbd7a284d0173b63144c74249a71b9c

This process continues — often billions or trillions of times — until a hash is found that begins with the required number of zeros. For example, a valid hash might look like 000000000000000004c2b7e31c9a7f4c2765cd29cfb88e947b0f7bb46a04f8e6. The string starts with a long sequence of zeros, which is what the Bitcoin network looks for to validate the block. That’s how miners “win” the chance to add a new block and earn their reward.

This trial-and-error method is what makes mining so computationally demanding. It’s why powerful machines and cheap electricity are key to success.

How long does it take to mine 1 bitcoin?

Mining doesn’t generate exactly “1 BTC” per session. Instead:

• each block mined yields 3.125 BTC (as of June 13, 2025)
• a new block is mined roughly every 10 minutes
• in a pool, miners earn fractions of rewards based on computing power

Solo mining might take years. In contrast, pool miners receive smaller, steady payouts.

Solo mining vs pool mining

Solo mining

In solo mining, an individual miner uses their own hardware to attempt to solve the cryptographic puzzle required to add a new block to the Bitcoin blockchain. If successful, the solo miner receives the entire block reward of 3.125 BTC, plus any transaction fees associated with that block. However, the chances of successfully mining a block solo are extremely low due to the high network difficulty and the immense computational power required.

Pool mining

Given the challenges of solo mining, many miners opt to join mining pools. In a mining pool, multiple miners combine their computational resources to increase the likelihood of mining a block. When the pool successfully mines a block, the 3.125 BTC reward is distributed among all pool members in proportion to the computational power (hashrate) they contributed. This approach provides miners with more consistent, albeit smaller, payouts.

What you need to mine bitcoin

Mining hardware

To mine bitcoin effectively, you’ll need powerful computers called ASICs (application-specific integrated circuits). These are designed specifically for mining and far outperform regular computers or graphics cards. Popular models include the Antminer S19 Pro (110 TH/s) and WhatsMiner M30S++ (112 TH/s). Expect to invest anywhere from £1,000 to £5,000 or more depending on the model and condition.

Mining pools

Because solo mining is highly competitive and statistically unlikely to succeed, most miners join mining pools. When the pool successfully mines a block, the reward is split among members based on how much they contributed. Top mining pools include F2Pool, AntPool, and ViaBTC.

Is bitcoin mining profitable?

Bitcoin mining can be profitable — but it depends on a few key factors.

First, let’s start with the potential upside. When you successfully mine a block, you receive a block reward — currently 3.125 BTC — plus transaction fees. At today’s prices, that’s worth a significant amount of money. But actually earning that reward requires serious investment.

To be profitable, you need:

• efficient hardware: ASIC miners can cost thousands of pounds, but they’re necessary to compete
• low electricity rates: mining is energy-intensive. If your electricity is expensive, your profits can vanish
• a good location: countries with cooler climates and cheap energy (like Iceland or parts of Canada) are more favourable
• a reliable mining pool: joining a pool increases your chances of earning regular rewards

Let’s break it down with an example:

• Imagine your ASIC miner consumes 3,000 watts of electricity and runs 24/7
• That’s about 72 kWh per day. At £0.15 per kWh, your daily electricity cost is over £10
• Multiply that by 30 days, and you’re spending £300/month just on power — not including hardware or maintenance costs

If your miner earns £400 in bitcoin that month, your profit is £100. But if Bitcoin’s price drops, or your equipment becomes outdated, that margin could disappear.

In short — mining can be profitable, but it’s not easy. Many people find it more practical to invest in bitcoin directly rather than mine it themselves.

If you're curious about crypto, you can see how to buy bitcoin easily on Revolut.

Block rewards

Block rewards are the main incentive for miners to keep the Bitcoin network running.

As of June 13, 2025, the block reward is 3.125 BTC. This amount halves roughly every four years in an event known as the halving. The halving helps control bitcoin’s supply and contributes to its scarcity over time.

In addition to the block reward, miners also collect transaction fees from the payments included in each block. As block rewards decrease in future halvings, these transaction fees will play a bigger role in incentivising miners.

Key facts:

• The block reward started at 50 BTC in 2009
• It halved to 25 BTC in 2012, then to 12.5 BTC in 2016, and 6.25 BTC in 2020
• The most recent halving in April 2024 reduced it to 3.125 BTC

How many bitcoins can be mined?

The maximum supply is fixed at 21 million bitcoins.

• Over 19.6 million have already been mined
• The last bitcoin will likely be mined by 2140
• Block rewards halve every 210,000 blocks (roughly every 4 years)

Eventually, transaction fees will be miners’ only revenue source.

What is a pre-mined cryptocurrency?

While Bitcoin relies on mining to gradually release new coins, some cryptocurrencies take a different approach. These are known as pre-mined cryptocurrencies.

In a pre-mined cryptocurrency, a portion (or all) of the total supply is created before the network is launched. These coins are often distributed to early investors, developers, or community members through methods like initial coin offerings (ICOs), airdrops, or team allocations.

Examples of pre-mined cryptocurrencies include:

• Ripple (XRP)
• Stellar (XLM)
• Cardano (ADA)

Pre-mining can accelerate network development and funding, but it also requires a high level of trust — since the creators control the initial distribution. In contrast, Bitcoin’s mining-based issuance model ensures coins are earned through computational work, making the process transparent and decentralised.

What is a bitcoin farm?

A bitcoin farm is like a big warehouse full of powerful computers that are all mining bitcoin around the clock. These farms are built to run hundreds or even thousands of mining machines 24/7.

The goal of a bitcoin farm is to earn as many bitcoins as possible by combining strong hardware, cheap electricity, and good cooling. Because mining takes a lot of energy, farms are usually located in places where electricity is inexpensive and the climate is naturally cool — like Iceland or parts of the US and Canada.

These farms make it hard for small, individual miners to compete. That’s why bitcoin mining today is mostly done by professional operations with big resources.

Can anyone mine bitcoin?

Technically, yes — but practically, it’s difficult without cheap electricity, cooling infrastructure, or advanced ASIC equipment. Beginners may find it easier to buy or trade bitcoin rather than mine it.

What’s the future of bitcoin mining?

As block rewards shrink, mining will depend more on transaction fees. Future developments include:

• greener mining tech
• regulation on power use
• possible shift toward hybrid consensus models
• faster, more efficient ASICs

Mining’s role is evolving — but it remains essential to Bitcoin’s security.

Get started

Bitcoin mining is a complex, capital-intensive activity. It can be rewarding, but also requires significant resources, research, and risk management.

If you’re curious about crypto but don’t want to mine, Revolut makes it simple:

• Buy crypto directly in-app
• Trade bitcoin with transparent fees
• Use Revolut X for advanced functionality
• Check out our approach to secure crypto transfers

The information provided is accurate as of 14 June 2025.

Not all cryptoassets carry the same risks. Before investing, read our cryptoasset specific risk summaries to make sure you understand the different risks associated with different types of cryptoassets.

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