Last updated: 5 October 2026 · By Spencer Li, CFTe

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.

If you want a daily routine for trading what you already understand, the free 15-Minute Swing Trader’s Checklist is at the end of this post.

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.

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.

Go deeper

The free 15-Minute Swing Trader’s Checklist has the daily routine, the questions to ask before every trade, and the five rules that keep you in the game.

About the author. Spencer Li is The 15-Minute Trader and the founder of Synapse Trading. He is a Certified Financial Technician (CFTe) with 15+ years of trading, run from 70+ countries. He holds a B.Acc and B.BM from SMU. Every trade he takes is public, dated, losses left in. He teaches rules-based swing trading in 15 minutes a day, one system for any market.

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.

Last updated: 5 September 2026 · By Spencer Li, CFTe

To store crypto safely, first decide who holds the keys. If an exchange holds your coins, your risk is that company. If you hold your own keys, your risk is your device and your own habits. For most people, the sensible setup is a small amount in a hot wallet for spending and longer-term holdings in a cold wallet kept offline. The recovery phrase goes on paper, in a safe place, and never into a website or anyone else’s hands.

Every crypto loss I have read about falls into one of 3 buckets. I call them the 3 ways people lose coins: the company fails, the device fails, or you do. Good storage is just a plan for each one.

In this post, I’m going to cover the 2 big choices, custodial or self-custody and hot or cold, then the rules that protect your recovery phrase, and a simple setup that covers all 3 risks. I will not name any wallet or exchange. The point is to understand how storage works, so you can judge any product yourself.

What does a crypto wallet actually hold?

Your coins sit on the blockchain itself. What a wallet holds is the private key, the secret code that lets you move them.

Ethereum.org puts it simply: “Wallet providers don’t have custody of your funds. They just provide you a window to see your assets on Ethereum and tools to easily manage them.”

So the real question in crypto storage is who can use your key.

Should you keep crypto on an exchange?

Keeping coins on an exchange is called custodial storage. The exchange holds the keys, and you log in with a username and password.

That is convenient, and you can reset a forgotten password. But ethereum.org spells out the trade: “you’re trusting that exchange with custody over your funds. If the exchange has financial trouble, your funds would be at risk.” Bitcoin.org calls it “a form of counterparty risk.”

This is not a theory. When a large exchange collapsed in late 2022, MAS told Parliament that “those who invested in cryptocurrencies through FTX’s global platform would have lost money.” What happened at FTX covers that story in full.

Singapore has tightened the rules since. In July 2023, MAS announced that licensed crypto service providers must “safekeep customer assets under a statutory trust before the end of the year,” to “facilitate the recovery of customers’ assets in the event of a DPT service provider’s insolvency.” Even so, MAS warned that “consumers may still face significant delays in recovering their assets in the event of insolvency.” A trust helps you get coins back. It does not make an exchange safe.

What is the difference between a hot wallet and a cold wallet?

If you hold your own keys, the next choice is how connected they are.

Bitcoin.org draws the line clearly. A hot wallet “runs on a device connected to the internet, such as a phone or computer,” which suits everyday payments. A cold wallet “keeps the private keys offline.” Bitcoin.org says that “protects them from online attacks and makes it the safer choice for long-term storage.”

Here is how the 3 main options compare:

If you want a daily routine for trading what you understand, the free 15-Minute Swing Trader’s Checklist is at the end of this post.

How do you protect your recovery phrase?

The recovery phrase, also called a seed phrase, is a list of words that can rebuild your wallet on any device. Ethereum.org calls it “the only way you’ll be able to recover your wallet.” That cuts both ways. Anyone who gets the phrase gets the coins.

Bitcoin.org’s rules are short, and worth following to the letter:

• Write it down and store it offline. “Never store your recovery phrase as a photo or in a cloud service, and never share it with anyone.”
• Nobody will ever need it. “No legitimate person, business, or support team will ever ask for it.”
• Treat any request for it as an attack, even one that looks like it comes from a wallet’s support team.

Most stolen phrases are not hacked. They are handed over, to a fake support chat, a fake wallet app or a fake “verification” page.

What are the 3 ways people lose coins?

1. The company fails

The exchange or app holding your coins goes bust, is hacked, or freezes withdrawals. The defence is to keep only what you are actively trading on an exchange, and move the rest to a wallet where you hold the key.

2. The device fails

A phone is lost, a laptop dies, a hardware wallet breaks. On its own, this should never cost you anything, because the recovery phrase can rebuild the wallet. Losses happen when the device fails and the phrase was never written down, or was lost too.

3. You fail

This is the biggest bucket. You send coins to the wrong address, approve a scam, or share your phrase. Bitcoin.org lists 3 principles that “prevent most scams”. Transactions “are irreversible, so verify everything before sending.” Nobody legitimate will ask for your phrase “or require payment in bitcoin to ‘unlock’ funds.” And “guaranteed-return investment offers are scams.”

Bitcoin.org also suggests checking “the entire receiving address before sending – not just the first and last characters” and sending “a small test transaction before a large transfer.”

What does a sensible setup look like?

Here is the setup bitcoin.org describes, and the one I would start from. “Many users combine both: a hot wallet with small amounts for spending, and cold storage for savings.” It adds that many people “keep only small amounts with custodians and store long-term savings in wallets where they hold the keys.”

In practice, that means:

1. Exchange: only the amount you are about to trade.
2. Hot wallet: a small amount you could lose without real pain.
3. Cold wallet: everything you plan to hold, with the recovery phrase on paper in a safe place.

There is one more step most people skip, and it is about family. If the phrase dies with you, so do the coins. Personally, I think anyone holding meaningful crypto should write down, somewhere their family can find it, where the coins are and how to reach the phrase, without writing the phrase itself in that note.

So how safe is your crypto right now?

Storage will not protect you from the price. MAS describes crypto trading as having an “extremely high risk and speculative nature,” and no wallet changes that. What good storage does is make sure that if you lose money, it is because of the market, and not because of a missing phrase or a failed company.

For the bigger picture, the blockchain and cryptocurrencies guide maps the topic, and how to invest in crypto without holding coins covers the routes that need no wallet at all.

So who holds your keys today? Where is your recovery phrase, right now? And if something happened to you tomorrow, could your family find your coins?

FAQ

What is the safest way to store crypto?

For long-term holdings, a cold wallet that keeps your private keys offline, with the recovery phrase written on paper and stored securely. Keep only what you are trading on an exchange.

Is it safe to keep crypto on an exchange?

It carries counterparty risk. If the exchange fails or is hacked, you can lose access to your coins. Singapore requires licensed providers to hold customer assets in trust, but MAS warns recovery can still take a long time.

What happens if I lose my hardware wallet?

You can rebuild the wallet on a new device with your recovery phrase. Without the phrase, the coins cannot be recovered.

Should I store my seed phrase in my phone or cloud?

No. Bitcoin.org says never to store it as a photo or in a cloud service. Write it down and keep it offline.

Go deeper

The free 15-Minute Swing Trader’s Checklist has the daily routine, the questions to ask before every trade, and the five rules that keep you in the game.

About the author. Spencer Li is The 15-Minute Trader and the founder of Synapse Trading. He is a Certified Financial Technician (CFTe) with 15+ years of trading, run from 70+ countries. He holds a B.Acc and B.BM from SMU. Every trade he takes is public, dated, losses left in. He teaches rules-based swing trading in 15 minutes a day, one system for any market.

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.