How does Bitcoin mining work?

Why mining exists

Bitcoin has no central authority. So who writes the next page (block) of the ledger, and why should everyone accept it? Bitcoin's answer is proof of work: whoever can prove they did a huge amount of computing work gets to write the next block.

Step by step

1. A miner gathers waiting transactions into a candidate block.
2. They search for a number that, combined with the block's data and hashed, produces a result starting with a certain number of zeros. It is like a lottery: the only way is to guess, billions of times a second.
3. The first miner to succeed broadcasts the block, and others can verify the answer almost instantly.
4. The winner earns a fixed amount of new bitcoin (the block reward) plus transaction fees.

A new block arrives about every 10 minutes on average. As more miners join, the puzzle automatically gets harder to keep that pace.

Why so much electricity?

Your chance of winning depends on how fast you can guess. Miners worldwide run thousands of specialised machines (ASICs), and studies estimate the network uses as much electricity as a mid-sized country. That energy is what secures the network, because cheating would require even more. It is also the main environmental criticism of Bitcoin.

Mining in Bangladesh: the reality

• Cost: a modern mining machine costs several lakh taka and must run day and night. At residential electricity prices, turning a profit is practically impossible.
• Legal risk: virtual currency transactions are not permitted in Bangladesh, and mined bitcoin is no exception. See the legal status.
• Fraud: offers like "invest in a mining machine for a fixed monthly return" or "mine on your phone" are almost always scams.

If an app says "keep it open and earn bitcoin" but asks you to deposit money before you can withdraw, it is a scam. See how to spot crypto scams.

Key points

• Mining adds new blocks to the network and creates new bitcoin.
• It now needs specialised hardware and huge amounts of electricity; phones and ordinary PCs are useless for it.
• Mining schemes with guaranteed returns are usually scams.