What is Bitcoin mining?

Bitcoin mining is the process by which new transactions are validated and added to the blockchain. Miners are the backbone of the Bitcoin network, they do the computational work that keeps it secure and decentralized.

The basic job of a miner

When you send Bitcoin to someone, that transaction is broadcast to the network but not yet confirmed. It sits in a waiting area called the mempool. Miners pick up transactions from the mempool, bundle them into a block, and then race to validate that block.

Validation requires solving a computational puzzle, specifically, finding a number that, when combined with the block's data and run through Bitcoin's SHA-256 hash function, produces an output meeting a specific difficulty target. This is "proof of work." There's no shortcut; miners have to try billions of combinations per second until one works.

The first miner to find a valid solution broadcasts it to the network. Other nodes verify the solution (which is easy to check, even though it's hard to find), and the block is added to the chain.

Why would anyone do this?

Miners are rewarded two ways:

• Block reward, newly created Bitcoin awarded to the winning miner. After the April 2024 halving, this is currently 3.125 BTC per block.
• Transaction fees, small fees paid by users to have their transactions included.

This is also how new Bitcoin enters circulation. Every Bitcoin that exists was created as a block reward at some point in history.

The difficulty adjustment

Bitcoin is designed to produce a new block approximately every 10 minutes, regardless of how much computing power is pointed at the network. If more miners join and blocks come faster, the network automatically increases puzzle difficulty. If miners leave, it decreases. This adjustment happens every 2,016 blocks, roughly every two weeks.

What mining means for you

You don't need to mine Bitcoin to own it. When you contribute through Astra, your payroll deduction is used to purchase Bitcoin that already exists on the market, you're buying from sellers, not mining new coins. Mining is the background process that keeps the whole system honest and functional.