Mining is a process by which new blocks are added to the blockchain.
Blocks contain transactions that are validated via the mining process by mining nodes on the Bitcoin network.
How New Coins Are Created and Transactions Verified
Blocks, once mined and verified are added to the blockchain which keeps the blockchain growing.
This process is resource-intensive due to the requirements of PoW where miners compete in order to find a number which is less than the difficulty target of the network.
This difficulty in finding the correct value (also called sometimes the mathematical puzzle) is there to ensure that the required resources have been spent by miners before a new proposed block can be accepted.
New coins are minted by the miners by solving the PoW problem, also known as partial hash inversion problem.
This process consumes a high amount of resources including computing power and electricity.
This process also secures the system against frauds and double spending attacks while adding more virtual currency to the Bitcoin ecosystem.
Why This Matters for Blockchain Technology
Roughly one new block is created (mined) every 10 minutes to control the frequency of generation of bitcoins.
This frequency needs to be maintained by the Bitcoin network and is encoded in the bitcoin core clients in order to control the money supply.
Miners are rewarded with new coins if and when they discover new blocks by solving PoW.
Miners are paid transaction fees in return for including transactions in their proposed blocks.
Key Points to Remember
- Mining Mining is a process by which new blocks are added to the blockchain.
- Blocks contain transactions that are validated via the mining process by mining nodes on the Bitcoin network.
- Blocks, once mined and verified are added to the blockchain which keeps the blockchain growing.
- This process is resource-intensive due to the requirements of PoW where miners compete in order to find a number which is less than the difficulty target of the network.
Going Deeper: Advanced Concepts
New blocks are created at an approximate fixed rate of every 10 minutes.
The rate of creation of new bitcoins decreases by 50%, every 210,000 blocks, roughly every 4 years.
When bitcoin was initially introduced, the block reward was 50 bitcoins; then in 2012, this was reduced to 25 bitcoins.
In July 2016, this was further reduced to 12.5 coins (12 coins) and the next reduction is estimated to be on July 4, 2020.
Conclusion
Mining represents one of the many innovative layers that make blockchain technology so powerful and transformative. As distributed systems continue to evolve, a solid understanding of these core concepts becomes increasingly valuable — not just for developers, but for anyone building, investing in, or working alongside blockchain-powered systems.
Whether you are just starting your blockchain journey or deepening existing expertise, mastering these fundamentals gives you the tools to think clearly about decentralized systems and make smarter decisions in this rapidly evolving space.