Mining

In mining, specialised machines race each other to find the next block. Whoever first finds a valid solution adds the block to the blockchain and receives the reward.

What miners do

• Confirming transactions: Miners take transactions from the mempoolGlossaryMempoolThe buffer in which a node collects valid but still unconfirmed transactions until a miner includes them in a block. There is no central mempool – every node keeps its own.On the learning path: Stage 5 · Step 4 – First withdrawal →In the glossary →× and include them in a block.
• Issuing new bitcoin: The first transaction in every block creates new coins for the miner. This is how bitcoin enter circulation without a central issuer.^[1]
• Securing the past: Every block is packed with computing work (proof of workGlossaryProof of workThe method by which miners prove that they have done real computing work for a new block. It lets the network agree on the valid chain without a central authority, and makes rewriting old blocks extremely expensive.On the learning path: Stage 1 · Step 3 – How does Bitcoin work? →In the glossary →×). Anyone wanting to change old entries would have to redo this work.

The block rewardGlossaryBlock rewardWhat a miner receives for a valid block: newly created bitcoin (the subsidy) plus the fees of all transactions in the block. The subsidy halves every 210,000 blocks; on 20 April 2024 it fell to 3.125 BTC.On the learning path: Stage 2 · Step 2 – Halving & 21 million →In the glossary →× consists of the subsidy (currently 3.125 BTC per block; it halves at every halvingGlossaryHalvingEvery 210,000 blocks – roughly every four years – the number of new bitcoin per block is cut in half. The fourth halving, on 20 April 2024, reduced it from 6.25 to 3.125 BTC.On the learning path: Stage 2 · Step 2 – Halving & 21 million →In the glossary →×) plus the fees in the block. The miner can only spend it 100 blocks later.^[2]

Miners only propose blocks. Every full nodeGlossaryFull nodeA node that checks every block and every transaction itself against all the consensus rules. If you run a full node, you don’t have to trust anyone to know whether a payment is valid.In the glossary →× checks them and rejects blocks that break the rules – for example, if a miner pays itself too large a reward.