What is Bitcoin mining?

Bitcoin mining is the process by which new bitcoin are released into circulation, and a critical component of developing and operating the Bitcoin blockchain globally.

What is Bitcoin mining?

Bitcoin mining is the process by which new bitcoin are released into circulation; and its is a critical component of developing the Bitcoin blockchain. By mining, you can earn cryptocurrency for free without having to buy it with fiat currency, similar to mining for gold or precious metals in the ground. Bitcoin miners receive bitcoin as a reward for completing "blocks" of verified transactions, which are added to the blockchain and downloaded by computer nodes around the world. Everyone who owns a Bitcoin node also has a copy of the entire Bitcoin blockchain, which is the most secure network and database in the world.

The Bitcoin rewards that miners receive are incentives that motivates them to legitimize and verify transactions. Mining is performed using very sophisticated computers that solve complex computational math problems. Mining rewards are paid to the first miner who discovers the solution to the puzzle. The high energy consumption of Bitcoin, about the same footprint as Las Vegas, is necessary to keep the network secure. To hack the network would require someone to harness the majority of the world's energy, and the price of Bitcoin would crash well before they had a chance to sell.

On January 3, 2009 the bitcoin network first came into existence with Satoshi Nakamoto mining the genesis block of Bitcoin (block 0), which had a reward of 50 bitcoins. The Bitcoin network has operated continuously for over 12 years with no double spending or security breaches.

There are only 21 million total bitcoin in the world, based on the rules in the original Bitcoin White Paper. As of June 2021, over 18.73 million bitcoin have been mined, which means the majority of bitcoins have already been mined. Only 2.27 million more bitcoin will be introduced. Once all the free bitcoin have been mined, miners will still be incentivized to process transactions to earn bitcoin rewards from traders, known as "mining fees".

The Bitcoin blockchain is approximately 350 gigabytes in size, growing 140% on average per year since 2009.