Bitcoin mining is the process by which transactions are officially entered on the blockchain; a decentralized, digital ledger that securely records transactions in a chain of “blocks”. Once a block is added, it’s permanently linked to the previous one, creating a permanent, transparent, and tamper-proof history of all transactions, as altering one block would require altering all subsequent blocks on the entire network, which is nearly impossible.

Miners use hardware and software to generate a cryptographic number that is equal to or less than a number set by the Bitcoin network’s difficulty algorithm. The first miner to find a solution to the problem receives bitcoins as a reward, and the process begins again. Winning a block is probabilistic. A miner’s chance equals their hash rate divided by total network hash rate, which is why miners tend to work in pools to increase that probability.