What is Bitcoin mining?
Bitcoin mining is the process that keeps the Bitcoin network secure and functional. Miners collect unconfirmed transactions, merge them into blocks, and then perform a massive number of hash attempts until they find a hash that satisfies the current weight of the network. The first miner to find a valid solution publishes their block, and once confirmed by the network, they receive a reward. If someone else solves a block before you, your result becomes a “stale block” and you have to start working on the next block.
As of 2025, the block reward is 3,125 BTC, following the April 2024 halving, and miners also earn transaction fees that vary depending on the load on the network. Competition is extremely fierce, so today almost all miners use specialized ASIC devices and join mining pools to stabilize their income by distributing rewards.
Fun fact: it is often mistakenly believed that miners “solve complex cryptographic puzzles”. In reality, there are no puzzles that miners simply make trillions of random attempts per second until one of them produces a hash below a given difficulty threshold.
Source: cointelegraph
How do you find a block?
The process of finding a Bitcoin block takes place in a few clear steps. First, the miner composes a candidate block using transactions that are waiting for confirmation in the mempool. It then adds a special “coinbase transaction” – independent of the Coinbase exchange – that creates new Bitcoins and adds any associated transaction fees. After that, the miner continuously hashes the block header using the SHA-256 algorithm, while changing the nonce, a one-time number that is used to generate different hash values.
The goal is to produce a hash that is lower than the network’s target difficulty threshold. When a miner finds a valid hash, the block is broadcast to the entire network. Other nodes independently verify proof-of-work and all transactions before adding the block to their own copy of the blockchain. If two miners find valid blocks almost simultaneously, a short chain separation may occur temporarily. The network solves this by accepting a chain with more accumulated proof-of-work, while other discarded blocks are marked as “barns”.
Such a system guarantees that Bitcoin always follows the chain with the most work invested, keeping divergences short and the network extremely resilient.
Source: cointelegraph
Rewards for miners after the last halving
The last, fourth Bitcoin halving occurred in April 2024, when the reward per block dropped from 6.25 BTC to 3.125 BTC. It is a fixed prize that all miners compete for. With an average of around 144 blocks mined per day, the network emits approximately 450 new BTC per day, excluding transaction fees.
Uncertainty of fees
Transaction fees make miners’ earnings unpredictable. In the period around the 2024 halving, online activity skyrocketed due to the launch of the Runes protocol, which flooded the mempool with transactions. In a short time, the fees even exceeded the block reward of 3,125 BTC alone, with individual blocks paying out dozens of BTC to miners only through fees, a rare and unexpected profit compared to the usual amounts.
But these jumps are not long-lasting. By mid-2025, median benefits had returned to normal levels as demand calmed down. This pattern repeats itself: whenever the mempool is overcrowded due to new protocols, hype cycles, or large on-chain events, users compete for prices for a limited space within Bitcoin blocks of 1–4 MB. When the crowd clears up, the “bidding” stops and the fee revenue returns to normal.
Source: cointelegraph
Hashrate and Mining Difficulty (Difficulty)
Mining power is measured by hashrate, the total computing power dedicated to securing the Bitcoin network. To keep the block creation time close to the target value of 10 minutes, Bitcoin adjusts the difficulty of mining every 2,016 blocks, approximately every two weeks.
The cycle works very simply: when the hashrate increases, blocks are found faster than intended, so the next adjustment raises the weight. If the hashrate drops, blocks are formed more slowly, so the weight decreases. For miners, this means that each new difficulty setting acts as a kind of “financial report” that determines how much profit will be made over the next two weeks.
In 2025, both hashrate and mining difficulty are at historically high levels. New, more efficient generations of ASIC machines are constantly being installed, which pushes the weight up and knocks older devices out of the market race. Operators with high electricity prices are usually the first to shut down equipment unless they find cheaper energy sources or profit from short-term spikes in Bitcoin price and transaction fees.
Source: cointelegraph
Mining in 2025.
Bitcoin mining in 2025 is all about maximizing the efficiency of every watt of energy consumed. The industry has far outgrown the hobby-rigs of earlier years — today professional farms and advanced specialized equipment dominate.
Hardware used by miners
At the heart of almost every modern mining farm are ASIC devices, machines designed exclusively for Bitcoin. Their efficiency is measured in joules per terahash (J/TH), which shows how much energy is required to generate a single unit of hash power.
Air-cooled devices: They are still the workhorses of the industry. Models like the Bitmain S21 (17.5 J/TH) and MicroBT M60S (18.5 J/TH) dominate large farms. The most advanced versions, such as the Bitmain S21 XP, achieve as much as around 13.5 J/TH.
Hydro and immersion (liquid) devices: They represent the cutting edge of technology. Examples like the S21 XP Hyd offer around 12 J/TH, but require specialized liquid cooling systems, which increases cost and operational complexity.
Cooling modes
Cooling has become a key item for large mining plants:
Air: The cheapest and simplest, but noisy and with a lower power density.
Immersion cooling: Devices immersed in dielectric fluid have a longer service life, higher uptime and the ability to stable overclocking; large facilities such as Riot Rockdale use entire halls of such systems.
Hydro cooling: Closed water systems integrated into the ASICs themselves offer superior efficiency, but require significant infrastructure investments.
Fleet Management Strategy
The economics of mining can change from week to week, so operators customize their farms through a combination of hardware selection and firmware settings:
Low-power (underclocking): It reduces hash power but increases efficiency — ideally when hashprice (revenue per unit of hash power) is low.
Overclocking: It reduces efficiency but increases overall output — used when the price of Bitcoin or fees skyrockets.
The golden rule of 2025 is: efficiency is more important than power alone, unless you have access to extremely cheap and stable electricity that can justify the higher consumption costs.
Energy
The cost of energy, local grid policies, and geographical conditions determine which miners will remain profitable and which will be squeezed out of the market.
How much energy does Bitcoin consume?
Estimates vary depending on the source. In May 2025. Digiconomist estimated that Bitcoin consumes about 190 terawatt hours of electricity annually — about as much as a medium-sized country like Poland or Thailand. Some other sources, including the Cambridge Bitcoin Electricity Consumption Index, estimate that Bitcoin accounts for about 0.8% of global electricity consumption. In the US, official data suggests that cryptocurrency mining accounts for 0.6% to 2.3% of total national demand.
Miners as flexible energy consumers
It is important to emphasize that miners can be a flexible burden on the power grid. For example, in Texas, ERCOT pays miners to reduce consumption during peak loads. Riot Platforms thus announced that in August 2023, these “demand-response” loans were worth the equivalent of 1,136 BTC, which clearly shows how such contracts can dramatically change the economics of mining.
Where are the miners located?
After China banned mining in 2021, much of the capacity moved to energy-rich regions. Texas became a major hub, while Canada’s hydroelectric and natural gas provinces attracted significant investment. By 2025, public mining companies operated an estimated 7.4 gigawatts of capacity across the U.S. and Canada.
The key factors remain the same: cheap and stable energy, regulatory-friendly conditions, and grid programs that reward miners for adaptive consumption reductions during peak hours.