BTC Mining – What Is It?

Bitcoin (BTC) mining is the process of verifying transactions on the Bitcoin network and introducing new bitcoins into circulation.

As of July 2024, approximately 19.5 million bitcoins were already in circulation. However, Bitcoin was designed with a maximum supply of 21 million coins, meaning the remaining approximately 1.5 million bitcoins will be released gradually over time. Users known as miners use powerful computers to solve complex mathematical problems and generate new bitcoins through the mining process.

Whenever someone makes a transaction on the Bitcoin network, it is placed into a block. Once the block is full, it must be verified before being added to the blockchain. This process is similar to filling a shopping cart at a store—before you leave, the cashier checks every item to ensure everything is correct.

Bitcoin mining can be compared to a digital treasure hunt. Miners equipped with powerful computers search for a 64-character hexadecimal code known as a hash, which represents a block of transactions. This code is found through a process called hashing.

Hashing requires specialized computing hardware to search through trillions of possible hash combinations until it finds one that matches the required mining difficulty, known as the target hash. Once the correct hash is found, miners validate the block and confirm its transactions. As a reward, new bitcoins are released into circulation. It is similar to a game where valuable rewards are locked and can only be unlocked by those with the necessary knowledge and computing power.

Finding the correct target hash can take a significant amount of time. The required time depends mainly on the current Bitcoin mining difficulty. The network automatically adjusts the difficulty every 2,016 blocks based on the number of miners participating in the network.

The more miners securing the Bitcoin network, the higher the mining difficulty becomes. Conversely, when fewer miners participate, the difficulty decreases. It is much like a treasure hunt—the more people searching for the treasure, the harder it becomes to find.

Bitcoin's creator, Satoshi Nakamoto, designed the network so that the block reward is cut in half every 210,000 blocks (approximately every four years). This mechanism creates digital scarcity and limits the number of new bitcoins entering circulation.

At this rate, the last bitcoin is expected to be mined around the year 2140.

After that, miners will continue to earn rewards through transaction fees for validating transactions, but no new bitcoins will be created.