Bitcoin Mining
Understanding the Bitcoin Mining Process
What is Bitcoin Mining?
Bitcoin mining is the process of creating new bitcoins and verifying transactions on the blockchain. Miners use powerful computers to solve complex mathematical problems. The first miner to solve the problem gets to add a new block to the blockchain and receives newly created bitcoins as a reward.
How Mining Works
Transaction Collection
Miners gather pending bitcoin transactions from the mempool.
Block Creation
Transactions are bundled into a block with a mathematical puzzle.
Proof of Work
Miners compete to solve the puzzle using computational power.
Block Reward
Winner adds the block to blockchain and receives new bitcoins.
Mining Equipment
ASIC Miners
Specialized hardware designed specifically for Bitcoin mining. Most efficient but expensive.
Highest EfficiencyGPU Mining
Graphics cards can mine Bitcoin but are less efficient than ASICs.
Medium EfficiencyCPU Mining
Regular computer processors. Not profitable for Bitcoin mining anymore.
Low Efficiency