Bitcoin mining is a process of verifying and adding transaction records to the public ledger called the blockchain. Bitcoin miners are rewarded with newly created bitcoins and transaction fees for their work in verifying and adding transactions to the blockchain.
The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus. Mining is also the mechanism used to introduce new bitcoins into the system.
Miners are paid any transaction fees as well as a “subsidy” of newly created coins. This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.
Bitcoin mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual blocks must contain a proof-of-work to be considered valid.
This proof-of-work (PoW) is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses a PoW function to protect against double-spending, which also makes Bitcoin’s ledger immutable.
When a block is discovered, the discoverer may award themselves a certain number of bitcoins, which is agreed-upon by everyone in the network. Currently this bounty is 12.
5 bitcoins; this value will halve every 210,000 blocks (approximately every four years). The block reward decreases transactions fees by creating an incentive for miners to include transaction data in their blocks. .
In conclusion, it is most profitable to mine Bitcoin with specialized ASIC miners that are designed specifically for Bitcoin mining and offer high hash rates with low power consumption.