Bitcoin mining: how does it work and what are its costs?
Mining is the process by which Bitcoin transactions are verified and new Bitcoins are created. Although it is difficult to mine Bitcoin profitably as an individual, understanding the process is important for every investor.
Thank you for reading this post, don't forget to subscribe!Proof of Work: the basis
Bitcoin uses Proof of Work (PoW). Miners compete to solve a mathematical puzzle (Hash Function). The first one to solve gets the reward (3.125 BTC after the 2024 halving). The required computing power and the number of miners determine the difficulty.
Mining equipment
ASIC Miners are computers dedicated to mining, thousands of times more efficient than a normal computer. Bitmain’s Antminer S21 Hydro and MicroBT’s Whatsminer M60 are the top models in 2025. Price: $3,000-$10,000 per unit.
Mining Pools
A single miner with one ASIC against a huge network? The chance of winning a block is almost zero. Mining Pools pool the power of thousands of miners and distribute the reward. Foundry USA, Antpool and F2Pool are the biggest in 2025.
The economy
Mining profitability depends on: Bitcoin price, electricity cost, and the global Hash Rate. With a price of $100,000 and an electricity cost of $0.05/kWh, a state-of-the-art ASIC may return the investment in 12-24 months. Read about Halving.
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