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Entrepreneur. Award winning. Decade of Launching & Investing in Startups.

[Seb Bunney @sebbunney]

Day 7 – What Do Bitcoin Miners Do?

Yesterday, we learned about the Bitcoin blockchain—the unchangeable ledger that records all transactions.

But this raises a big question: who actually adds transactions to the blockchain?

In traditional finance, transactions are processed by a centralized entity—your bank, PayPal, Visa. These institutions decide what transactions go through, and they have the power to censor, reverse, or freeze payments at will.

Bitcoin removes this centralized control by replacing it with miners—independent participants who process transactions.

To ensure no single entity has control, Satoshi designed mining as an open, global competition, where miners compete to find a valid block, and approximately every 10 minutes, one successfully does—earning the right to add it to the blockchain. The cool part... anyone, anywhere can participate—as long as they follow Bitcoin’s rules.

🔹 Why Do Miners Compete?

Simple: Rewards.

If a miner wins, they earn:
💰 Newly minted bitcoin (currently 3.125 BTC per block)
💰 Transaction fees from the block they add to the blockchain

This economic incentive keeps miners competing, ensuring the network remains decentralized and secure.

🔹 How Do Miners Compete?

At its core, mining is a race—but not the kind most people imagine. It's like a precision golf match with thousands of players. Everyone keeps swinging, trying to score under a certain threshold. The first to do so wins the round, and the game restarts.

Every miner takes transaction data and runs it through a cryptographic function called hashing (covered yesterday). This hashing process condenses information into a unique, fixed-length number—called a hash. But this hash isn’t just random—it has to meet a strict requirement:

The hash must be below a certain target value set by the network.

👉 The lower the number, the better—like golf.
👉 Miners adjust a small block variable called a nonce, changing it with each attempt to produce a new hash, repeating the process until they generate a number below the target threshold.
👉 The first miner to generate a valid hash wins the round and gets to add the next block to the blockchain.

The more hashes a miner generates per second, the higher their chances of winning—this is why miners use specialized hardware and consume energy.

🔹 What Makes Bitcoin More Censorship-Resistant Than Traditional Financial Systems?

This open competition ensures no single miner controls which transactions get processed.

Even if one miner refuses to include a transaction, others have a financial incentive to add it in the next block. While an entity may choose to ignore a transaction, the system rewards those who process valid transactions, ensuring no one can permanently blacklist an address, freeze your funds, or stop a payment from going through.

🔹 Why Does Energy Matter?

✔️ Makes fraud impractical – Changing past transactions would require redoing all the computational work across the entire network, which is astronomically expensive and nearly impossible.

✔️ Incentivizes honesty – Mining is costly. The only way to earn bitcoin is to play by the rules and contribute computing power to securing the network.

✔️ Ensures global consensus – Since thousands of independent miners compete, no single entity can control or alter the blockchain to their advantage.

As bitcoin’s price rises, so does its hash rate—a measure of the total computational power securing the network. A higher hash rate means more miners are competing, making the network even harder to attack.

Fun Fact: Every 10 minutes, a new block is mined. Right now, the block reward is 3.125 BTC. That means if you own 3.125 BTC, at some point, every single miner in the world was competing for 10 straight minutes to mine the bitcoin you own. That’s how much effort goes into securing the network.

Bitcoin mining isn’t just about creating new bitcoin—it’s the backbone of Bitcoin’s security, censorship resistance, and decentralization.

But miners don’t control Bitcoin—nodes do. Let’s explore how they enforce the rules tomorrow. 🚀

Check the comments 👇 tomorrow for Day 8! #21DaysOfBTC

📌 Side Note: This is part of “Understanding Bitcoin: A 21-Day Journey.” After 21 days, you’ll know more than 99% of people about how Bitcoin truly works.

New here? No worries—start from the beginning here: https://t.co/WjF5tG50p8

[BITMAIN @BITMAINtech]

BITMAIN is honored to collaborate with Exahertz and Moonwalk Systems, shaping the future of Oman's blockchain domain. Explore our esteemed partnership as we embark on a revolutionary journey in the Middle East. Dive in 👉 Exahertz website：https://t.co/hMZkSgCTyX

[Jaran Mellerud 🇳🇴 @jmellerud]

Oman has the potential to become the biggest #bitcoin mining hub in the Middle East.

Read this thread to learn more - and don't forget to read the entire article at the end.

[Forbes Crypto @ForbesCrypto]

Oman is investing heavily in the bitcoin mining industry. @IrinaHeaver reports

https://t.co/psyOuktYco

[Luxor Technology 🟧⛏️ @luxor]

🇴🇲Exahertz held a ribbon cutting ceremony this week for its new #Bitcoin mining site, the largest in the country👀

$370M went into this hydro-cooled mining farm in Salalah. The country could see investments of up to $1.1 BLN into the BTC mining industry over the coming years😮

[وزارة النقل والاتصالات وتقنية المعلومات @mtcitoman]

معالي المهندس سعيد بن حمود المعولي يزور مركز "استضافة ومعالجة البيانات وتعدين العملات الرقمية المشفرة" التابع لشركة اكساهيرتز انتيرناشيونال وذلك في المنطقة الحرة بصلالة.

[Jaran Mellerud 🇳🇴 @jmellerud]

Exahertz has officially launched their impressive new #bitcoin mining site.

The hydro-cooled site is located in Salalah in southern Oman🇴🇲, which has the most bitcoin-mining-friendly climate in the Arabian Peninsula.

https://t.co/ojRYDQJ0xN

[Luxor Technology 🟧⛏️ @luxor]

🤯 NEW: Exahertz has publicly announced their #Bitcoin mining farm in Oman 🇴🇲👇

[Exahertz.com @exahertzcom]

Exahertz secures government approval for its blockchain data center project in Oman https://t.co/bWBRz37dxr

#exahertztechnologypark #exahertoman #btc #exahertzbtc #moonwalksystems

[Scuderia Ferrari HP @ScuderiaFerrari]

Back in our favourite office 👊😎

#essereFerrari @ShwartzmanRob

[D D @dragosid]

@JA_Beach_Studio Yeah, it looks awesome https://t.co/W2m5R850d7 will ping you if I'll get to that side of Thailand

[D D @dragosid]

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