Mining and Proof of Work
How Blockchain WorksLesson 2·10 min read
Lesson by Uvin Vindula
Bitcoin mining is the process that adds new blocks to the blockchain and creates new Bitcoin.
The Mining Process
- Pending transactions sit in the "mempool" (waiting room)
- Miners select transactions, bundle them into a candidate block
- Miners race to solve a mathematical puzzle (SHA-256 hash function)
- It's pure trial and error — billions of guesses per second
- First miner to solve it broadcasts the block to the network
- Other miners verify it and add it to their chain
- The winning miner receives: Block Reward + Transaction fees
The Difficulty Adjustment
Every 2 weeks, Bitcoin adjusts how hard the puzzle is — to keep blocks coming every ~10 minutes. If more miners join, it gets harder. If miners leave, it gets easier. This self-regulating mechanism is genius.
Energy and Security
Bitcoin mining uses significant energy — and this is intentional. The energy cost is what makes attacking the network expensive.
Key Takeaways
- •Mining secures the network and creates new Bitcoin
- •Proof of Work = spending real-world resources (energy) to earn the right to add blocks
- •Miners are rewarded with block rewards + transaction fees
- •Difficulty adjusts every 2 weeks to maintain 10-minute block times
Quick Quiz
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What is Proof of Work?