What Do Bitcoin Miners Do, And How Do They Get Paid?

You send Bitcoin (BTC), close the wallet and wait for the payment to be confirmed. Who puts it into the record if there is no bank processing it?

That is where miners come in. They compete to add a batch of transactions, called a block, to Bitcoin's public record, the blockchain. A miner whose block is accepted can collect new bitcoin and transaction fees.

The competition does more than process payments. It makes rewriting the record expensive.

Are miners the people checking Bitcoin?

They are part of the process, but there are two jobs to understand.

Full nodes check transactions and blocks against Bitcoin's rules. For example, a payment cannot spend the same coins twice. A node runs software that checks those rules for itself. It does not receive a mining reward just for checking.

Miners assemble blocks and compete to add them. Nodes then check the blocks miners produce. The same operator can run mining equipment and a node, but the jobs are different.

Think of a miner proposing the next page of a shared record. Other computers still check that the page follows the rules. A powerful miner cannot make an invalid payment valid simply by including it.

If you are new to the wider system, our Bitcoin explainer follows a payment from the wallet to the network.

What are the machines actually doing?

Mining is often described as solving a complicated maths problem. That can make it sound as though the machines are working through useful equations. In practice, they are trying large numbers of possible answers.

The mining software prepares a block. Specialised hardware takes its header, a compact set of information identifying the block, and runs it through a hash function. A hash function turns data into a number that looks random.

For the block to qualify, that number must meet Bitcoin's target. If it doesn't, the machine changes part of the input and tries again. This repeated calculation is called proof of work.

Finding a qualifying result is hard. Checking that result is straightforward, so the rest of the network can check the miner's work without repeating every attempt.

Bitcoin adjusts the difficulty every 2,016 blocks, aiming for an average gap of about ten minutes between blocks. An individual block can arrive much sooner or later. Adding more machines does not permanently turn that average into one block every minute.

Where does the payment come from?

The reward has two parts. The block subsidy is newly created bitcoin. Transaction fees come from payments included in the block, so those coins already existed.

The miner claims them through a special first transaction in the block, called the coinbase transaction. It records the miner's claim to the subsidy and fees.

The subsidy follows a schedule, falling by half every 210,000 blocks. Our halving explainer covers that schedule. Fees vary, so a miner's total reward does not follow a fixed amount per block.

Receiving a reward also isn't the same as making a profit. Equipment and electricity cost money, whether a machine finds a block or not. Bitcoin.org describes mining as a competitive business with no guaranteed profit.

Why do miners join pools?

Imagine running a small amount of mining equipment on your own. It could keep working for a long time without finding a block, leaving you with electricity bills and no block reward.

A mining pool combines work from many miners. Participants submit easier results called shares, which help the pool measure how much work each contributed. Occasionally, a result also meets Bitcoin's harder target and produces a block.

The pool distributes payments under its own payout scheme. Pooling makes income less uneven, but it also means accepting the operator's payment rules. Different pools pay differently. Submitting a share is not the same as finding a Bitcoin block.

Why does all that work matter?

Each block links to the one before it. To replace an old transaction, an attacker would have to redo the work for its block and the blocks after it, then compete with the continuing chain. More confirmations make that task harder. They don't turn a payment into a mathematical impossibility to reverse.

That protection uses real computing equipment and electricity. The same recurring cost that makes mining expensive for an operator makes rewriting the record expensive for an attacker.

Miners are paid to build that record within the rules. The nodes checking their blocks are what stop the reward from becoming permission to write whatever they want.