What Is Bitcoin Mining? How It Works, in Plain Numbers

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Last updated: 16 October 2026 · By Spencer Li, CFTe

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Bitcoin mining is how new transactions get added to the Bitcoin blockchain, and how new bitcoins are created. Computers around the world race to solve a guessing puzzle. The first one to find a valid answer adds the next block of transactions, and collects a reward in bitcoin. The puzzle is hard on purpose, because the cost of solving it is what makes the record expensive to fake.

Bitcoin.org puts it in one line. Mining is “the process of spending computing power to process transactions, secure the network, and keep everyone in the system synchronized together.”

In this post, I’m going to walk through how the puzzle works, what a miner earns today, why the reward keeps halving, and why mining at home no longer makes sense for almost anyone. Every number below was read from a live source on the date shown.

How does Bitcoin mining actually work?

Think of it as a lottery where every ticket costs electricity.

Every few minutes, thousands of new Bitcoin transactions are waiting to be confirmed. Each miner bundles a set of them into a candidate block. To get that block accepted, the miner has to find a number that, combined with the block’s contents and run through a scrambling function, produces a result below a target. There is no shortcut. The only way is to guess, check, and guess again, trillions of times a second.

The first miner to find a winning guess broadcasts the block. Every other computer on the network checks it in a fraction of a second, which is the clever part. A winning answer is very hard to find but very easy to verify. Once accepted, the block is chained to the one before it, and the race starts again on the next one.

This system is called proof of work, and proof of work versus proof of stake compares it with the method Ethereum uses today.

Why is it always about 10 minutes?

Because the puzzle adjusts itself. Bitcoin.org explains that the difficulty is set so that “the average time to find a block remains equal to 10 minutes.” In the Bitcoin Core source code, the target is written as nPowTargetSpacing = 10 * 60, which is 600 seconds.

If more miners join and blocks start coming faster, the puzzle gets harder. If miners leave, it gets easier. That is why adding more machines to the network does not create bitcoin any faster. It only raises the cost of each block.

How much do miners earn?

A miner who wins a block earns 2 things: newly created bitcoin, called the block subsidy, and the fees attached to the transactions inside the block.

Here are the live numbers, read on 16 October 2026:

An EH/s is an exahash per second, a billion billion guesses every second. That last row is the one that matters for anyone thinking of mining at home.

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What is the Bitcoin halving?

The halving is the built-in cut to the block subsidy. In the Bitcoin Core code it is set by nSubsidyHalvingInterval = 210000, so every 210,000 blocks, the new bitcoin per block falls by half. At 10 minutes a block, that works out to roughly every 4 years.

The subsidy started at 50 BTC per block in 2009. It is 3.125 BTC today. The next halving lands at block 1,050,000, which is 78,380 blocks after the 16 October reading. At the 10-minute pace, that is about 544 days away, or around April 2028. Treat that date as an estimate, because blocks rarely arrive exactly on time.

Bitcoin.org describes where this ends: the reward is “halved over time until bitcoin issuance halts completely with a total of 21 million bitcoins”. After that, miners will be paid by transaction fees alone. Nobody knows yet whether fees will be enough to keep the same level of security, and that is one of the open questions in Bitcoin’s design.

[INFOGRAPHIC: the halving staircase, 50 BTC in 2009 stepping down to 25, 12.5, 6.25 and 3.125 BTC today, with the 21 million cap as a ceiling line and about 20.10 million issued as of October 2026]

Can you still mine Bitcoin at home?

In practice, no. Bitcoin.org says that “the only cost-effective method of mining today is using specialized hardware.” Those machines are built for one job, and an ordinary computer has no chance against them.

Let me put numbers on it. Take a hypothetical machine doing 200 TH/s, a terahash being a thousand billion guesses a second. Against a network of roughly 1,000 EH/s, that machine’s share of all the guessing is about 0.0000194%.

Here is the arithmetic:

• 200 TH/s ÷ about 1,033,000,000 TH/s = a share of about 0.000000194
• 144 blocks a day × 0.000000194 = about 0.000028 blocks a day
• 1 ÷ 0.000028 = about 36,000 days between wins, or roughly 98 years

So on its own, that machine would expect to win a block about once a century. This is why almost everyone who still mines joins a pool. The pool combines thousands of machines, wins blocks regularly, and splits the reward by how much work each member contributed. The pool does not change the average payout. It only smooths it, so you get small, steady payments instead of waiting for a lottery win.

Then there is the bill. Your small share of the reward has to beat your electricity, cooling, the machine’s cost, and the pool’s fee. Run that sum on your own electricity tariff before buying anything. And remember that every new machine on the network shrinks the share of every machine already there.

Is Bitcoin mining bad for the environment?

This is the most argued question in the whole topic, so here are both sides.

The critics’ case is simple. Mining turns electricity into guesses, and the network now does a billion billion guesses a second. That uses a lot of power, and some of it comes from fossil fuels.

The defenders’ case is that the cost is the point. Rewriting Bitcoin’s history would mean redoing all that work faster than the rest of the network, which is what a 51% attack tries to do. They also argue that miners chase the cheapest power, which is often surplus or renewable energy that would otherwise go unused.

Both points can be true at the same time. How much weight you give each one depends on whether you think the network is worth securing in the first place.

What should you take away from this?

Personally, I find mining easiest to understand as a security budget. The network pays miners, in new coins and fees, to make cheating more expensive than playing fair. The halving cuts that budget on a fixed schedule, and that schedule is written into the code for anyone to read.

If you came here wondering whether mining is a way into crypto, the honest answer for most people in Singapore is that it is not. The hardware is specialised, the competition is global, and the electricity bill is local. For the bigger picture of what you would be holding, what is Bitcoin covers the basics, and the blockchain and cryptocurrencies guide maps the rest.

So which side of the energy debate do you lean towards? And does knowing the halving schedule change how you read the next round of headlines about it?

FAQ

What is Bitcoin mining in simple terms?

Computers compete to solve a guessing puzzle. The winner adds the next block of transactions to the blockchain and earns newly created bitcoin plus fees.

How long does it take to mine 1 Bitcoin?

The whole network creates about 450 BTC a day at today’s 3.125 BTC per block. For a single machine, it depends on its share of the network’s computing power, which for a home setup is tiny.

What happens when all 21 million bitcoins are mined?

New issuance stops, and miners are paid only by transaction fees. Under the current schedule, that is expected to take more than a century.

Is Bitcoin mining legal in Singapore?

This post does not cover the legal position, and the rules can change. Check the current position with the relevant authority before buying any mining equipment.

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About the author. Spencer Li is the founder of Synapse Trading and a Certified Financial Technician (CFTe). His trade log is public: every trade since April 2024, dated, losses left in.

Educational content only, not personalised financial advice. Trading carries risk, including loss of capital. Past performance is not indicative of future results. Synapse Trading is not licensed or regulated by MAS.

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