What is Bitcoin Mining?
Bitcoin mining is the process of validating transactions and adding new blocks to the Bitcoin blockchain. Miners use specialized computers (ASICs) to solve complex cryptographic puzzles. The first miner to solve the puzzle earns the block reward, currently 3.125 BTC per block.
This process serves two critical functions: it secures the network against attacks and creates new bitcoins according to a predetermined supply schedule. With only 21 million BTC ever to exist, mining is how new coins enter circulation.
⚡ Fast Fact:
The Bitcoin network processes ~450 new BTC daily across 144 blocks, consuming approximately 150 TWh of electricity annually. Equivalent to Argentina's total energy consumption.
How Does Bitcoin Mining Work?
Mining involves generating random numbers (hashes) until finding one that matches the network's target. This is called Proof-of-Work. The process requires massive computational power, which is why specialized hardware (ASICs) dominates the industry.
~900 EH/s
Network Hashrate
Source: CoinWarz, Jan 2026
146T
Mining Difficulty
Source: Bitcoin Protocol
~10 min
Block Time
Source: Bitcoin Protocol
3.125 BTC
Block Reward
Source: Post-2024 Halving
Mining Economics: The Real Numbers
Bitcoin mining profitability depends on three main factors: electricity cost, hardware efficiency, and Bitcoin price. In January 2026, with hashprice at ~$40/PH/s/day, only operations with electricity below $0.05/kWh remain profitable.
Cost Breakdown per Bitcoin Mined
⚠️ Important:
At current network difficulty (146T), mining one Bitcoin requires approximately 850,000 kWh of electricity. At the US average rate of $0.13/kWh, this costs over $110,000 per BTC. Home mining is unprofitable in most Western countries.
Electricity Costs by Country: Where Mining is Profitable
Location is everything in Bitcoin mining. The difference between $0.01/kWh and $0.10/kWh can mean the difference between 70% profit margins and operating at a loss. Here's how countries compare:
*Daily profit calculated for Antminer S21 XP (270 TH/s) at current BTC price. Data: GlobalPetrolPrices.com, IEA, January 2026
*Turkmenistan: $0.011/kWh is the special commercial rate for licensed miners. Residential rate is $0.007/kWh.
🇹🇲 Why Turkmenistan?
- 4th largest natural gas reserves in the world (Source: BP Statistical Review)
- Government-subsidized electricity
Was FREE until 2019, residential still at $0.007/kWh (Source: IEA)
- $0.011/kWh for licensed miners
Special commercial rate, lowest in the world for industrial mining
- Virtual Assets Law 2025
Legal framework for licensed mining operations
ASIC Miners Compared: Real Performance Data
We analyzed public performance data from mining pools and manufacturer specifications to compare the most popular Bitcoin ASICs in 2026:
Data: Bitmain specifications, Hashrate Index reviews. Real-world variance: ±3% hashrate, ±5% power consumption.
📊 Key Insight:
The S21 series shows 38% better MTBF (Mean Time Between Failures) than the S19 series, according to OEMMiner surveys of 1,038 miners. At 12,400 hours MTBF, expect reliable operation for 1.4+ years before maintenance.
Bitcoin Halving: Impact on Mining 2024-2032
Every 210,000 blocks (~4 years), Bitcoin's block reward is cut in half. This "halving" directly impacts mining profitability and eliminates inefficient operators:
2020
6.25 BTC
Break-even: $0.09/kWh
2024
3.125 BTC
Break-even: $0.05/kWh ← NOW
2028
1.5625 BTC
Break-even: ~$0.024/kWh
2032
0.78125 BTC
Break-even: ~$0.012/kWh
⚠️ 2028 Projection:
After the 2028 halving, only operations with electricity below $0.024/kWh will remain profitable. This eliminates approximately 96% of current mining locations. Turkmenistan ($0.011/kWh) survives all halvings through 2036.
