Bitcoin mining is the process of adding new blocks to the blockchain and creating new coins. It is based on the Proof of Work algorithm: computers around the world solve complex mathematical problems. The first one to find the solution gets the right to record the next block and receives a reward in BTC.
To mine, a special mining computer is needed — ASIC (Application-Specific Integrated Circuit), which is significantly more powerful than regular PCs. These devices operate around the clock, consuming a lot of electricity. Therefore, the largest farms are built in countries with cheap electricity — for example, in Iceland, Kazakhstan, China (before the ban), and the USA.
Each block is mined approximately every 10 minutes. During this time, thousands of devices around the world compete in "guessing" the required hash. The difficulty automatically increases if the network becomes more powerful, and vice versa.
Interestingly, every 4 years a halving occurs — the reward for a block is halved. This is an embedded deflation mechanism: in 2009, the reward for a block was 50 BTC, in 2024 — it will be 3.125 BTC. There can be no more than 21 million bitcoins in total — and almost 94% have already been mined.
