How Bitcoin Mining Works
Mining is how Bitcoin stays secure and how new bitcoin enters the world. Don't worry—we'll explain it simply, no tech background needed.
What Is Mining?
Think of miners as Bitcoin's accountants. When you send Bitcoin to someone, miners are the ones who check that you actually have the Bitcoin you're sending, then write it down in Bitcoin's permanent record book (called the blockchain).
Every 10 minutes or so, one miner “wins” the right to add the latest page of transactions. As a reward, they get newly created bitcoin. That's the only way new bitcoin comes into existence.
Simple analogy: Imagine a lottery where you win by being first to solve a puzzle. The puzzle is hard, so you need powerful computers. Winners get paid in fresh bitcoin. This makes cheating extremely expensive—you'd have to outspend everyone else combined.
Uses Real Energy
Miners spend real electricity, so cheating costs real money. This keeps Bitcoin honest.
No Boss
Anyone can become a miner. No company or government controls who participates.
Can't Be Undone
Once a transaction is recorded, it's there forever. No one can erase or change it.
The Halving (Why It Matters)
Every 4 years, the reward for mining gets cut in half. This is called the “halving.”
When Bitcoin started in 2009, miners earned 50 bitcoin per block. After the first halving in 2012, it dropped to 25. Then 12.5 in 2016. Then 6.25 in 2020. After the April 2024 halving, it's just 3.125 bitcoin.
Less new bitcoin = more scarcity. Think of it like a gold mine that produces less gold each year. If people still want gold but there's less of it, the price tends to go up. Historically, Bitcoin's price has risen significantly after each halving.
The Complete Halving Schedule
This schedule is locked in Bitcoin's code. It can't be changed by anyone.
| Halving | When | Miner Reward | Total BTC After |
|---|---|---|---|
| Start | Jan 3, 2009 | 50 BTC | 0 |
| 1st✓ | Nov 28, 2012 | 25 BTC | 10.5M |
| 2nd✓ | Jul 9, 2016 | 12.5 BTC | 15.75M |
| 3rd✓ | May 11, 2020 | 6.25 BTC | 18.375M |
| 4th✓ | Apr 20, 2024 | 3.125 BTC | 19.6875M |
| 5th | ~2028 | 1.5625 BTC | 20.34M |
| 6th | ~2032 | 0.78125 BTC | 20.67M |
| 7th | ~2036 | 0.390625 BTC | 20.84M |
| 8th | ~2040 | 0.1953125 BTC | 20.92M |
| 9th | ~2044 | 0.09765625 BTC | 20.96M |
| 10th | ~2048 | 0.04882812 BTC | 20.98M |
| 11th | ~2052 | 0.02441406 BTC | 20.99M |
| 12th | ~2056 | 0.01220703 BTC | 20.995M |
| 13th | ~2060 | 0.00610351 BTC | 20.9975M |
| 14th | ~2064 | 0.00305175 BTC | 20.99875M |
| 15th | ~2068 | 0.00152587 BTC | 20.999375M |
| 16th | ~2072 | 0.00076293 BTC | 20.9996875M |
| 17th | ~2076 | 0.00038146 BTC | 20.9998437M |
| 18th | ~2080 | 0.00019073 BTC | 20.9999218M |
| 19th | ~2084 | 0.00009536 BTC | 20.9999609M |
| 20th | ~2088 | 0.00004768 BTC | 20.9999804M |
| 21st | ~2092 | 0.00002384 BTC | 20.9999902M |
| 22nd | ~2096 | 0.00001192 BTC | 20.9999951M |
| 23rd | ~2100 | 596 sats | 20.9999975M |
| 24th | ~2104 | 298 sats | 20.9999987M |
| 25th | ~2108 | 149 sats | 20.9999993M |
| 26th | ~2112 | 74 sats | 20.9999996M |
| 27th | ~2116 | 37 sats | 20.9999998M |
| 28th | ~2120 | 18 sats | 20.9999999M |
| 29th | ~2124 | 9 sats | 20.99999995M |
| 30th | ~2128 | 4 sats | 20.99999997M |
| 31st | ~2132 | 2 sats | 20.99999998M |
| 32nd | ~2136 | 1 sat | 20.99999999M |
| 33rd (Final) | ~2140 | 0 | 21M |
By around 2140, all 21 million bitcoin will exist. No more will ever be created.
How Bitcoin Stays Stable
Bitcoin is designed to create one new block every 10 minutes, no matter what.
If lots of new miners join and blocks start coming faster, Bitcoin automatically makes the puzzle harder. If miners leave and blocks slow down, the puzzle gets easier. This adjustment happens every 2 weeks.
More Miners?
Puzzle gets harder. Blocks still come every ~10 minutes.
Fewer Miners?
Puzzle gets easier. Blocks still come every ~10 minutes.
Why this is brilliant: No one controls this. It's automatic, based on math. The network self-regulates without any central authority making decisions.
Transaction Fees
Each block can only fit so many transactions. When lots of people want to send Bitcoin at once, they compete by offering higher fees. Miners pick the highest-paying transactions first.
Busy Times = Higher Fees
During bull markets or big events, everyone wants to transact. Fees spike because people bid against each other for space.
Quiet Times = Low Fees
On weekends or slow periods, fees can drop to just a few cents. Patient users wait for these windows.
Important for the future: As mining rewards shrink to zero by 2140, fees will become the only payment miners get. A healthy fee market means Bitcoin stays secure forever.
Why Mining Affects Bitcoin's Price
Mining costs real money. Miners pay for expensive computers and electricity. If Bitcoin's price drops too low, they can't cover their costs and have to shut down.
The “Price Floor”
If Bitcoin drops below what it costs to mine, miners stop. Less mining = less new bitcoin being sold = price tends to recover. This creates a natural support level.
More Mining = More Security
The more miners there are, the harder (more expensive) it is to attack Bitcoin. Right now, Bitcoin has more mining power than ever—it's extremely secure.
The Bottom Line
Unlike dollars (which the government can print whenever it wants), new bitcoin requires real work and real energy. You can't fake it or create it from nothing. That's part of why people trust it.
Can I Earn Mining Rewards?
You don't need to buy expensive equipment or understand the technical details.
GoMining
From ~$30Earn Bitcoin without the hardware
GoMining lets you earn Bitcoin mining rewards without buying or managing mining equipment. You buy digital shares backed by real mining facilities, and receive daily Bitcoin payouts based on your share.
Affiliate disclosure: The GoMining link above is an affiliate link. We may earn a commission at no extra cost to you. This helps support this free calculator.
Common Questions
Is Bitcoin mining bad for the environment?
It's more nuanced than headlines suggest. Miners seek cheap electricity, which often means renewable energy (solar, hydro, wind) or energy that would otherwise be wasted (like natural gas that's burned off at oil wells). Over 50% of mining now uses renewable energy. Some miners even help stabilize power grids by using excess energy during off-peak hours.
What happens when all bitcoin is mined?
By around 2140, miners will earn only transaction fees, not new bitcoin. But that's okay—if Bitcoin is widely used by then, the fees alone will be enough to keep miners profitable and the network secure.
Can't someone just change the rules?
No. Bitcoin's rules are enforced by thousands of computers around the world. To change something, nearly everyone would have to agree. If someone tried to create more than 21 million bitcoin, everyone else would simply ignore them. This is what makes Bitcoin's rules essentially permanent.
What if a country bans mining?
Mining moves. When China banned mining in 2021, miners relocated to the US, Kazakhstan, and elsewhere within months. Bitcoin kept working perfectly. No single country can stop it.
Should I mine bitcoin myself?
For most people, no. Home mining rarely makes sense because you're competing against massive industrial operations with cheap electricity. Most beginners are better off just buying bitcoin through an exchange or using a service like GoMining.
Ready to Start Investing?
Use our calculator to see how regular Bitcoin purchases would have grown over time. We also have a live halving countdown widget.
Disclaimer: The GoMining link on this page is an affiliate link. If you purchase through that link, we may earn a commission at no extra cost to you. This page is for educational purposes only and is not financial advice. Bitcoin and mining investments carry risk. Always do your own research. This site may also display ads; see /about for full disclosure.