How Does Cryptocurrency Mining Work?

In proof-of-work (PoW) cryptocurrencies like Bitcoin, mining is the process that validates transactions and adds them to the blockchain. Miners compete to solve a cryptographic puzzle: they must find a hash (a fixed-length output from a hash function) that meets specific difficulty criteria. This requires trillions of guesses per second, consuming significant computing power and electricity. The first miner to find a valid hash broadcasts the solution to the network; other nodes verify it, the block is added to the chain, and the miner receives a reward (currently 3.125 BTC per block as of 2024). The difficulty adjusts automatically to maintain a target block time of about 10 minutes, regardless of how much computing power joins the network.