Bitcoin Mining: What is it and how does it work?

Question

Bitcoin mining is the fundamental pillar of the system that verifies transactions on the Bitcoin blockchain and generates new units of this cryptocurrency. This process uses the consensus mechanism known as Proof of Work (PoW), where miners compete to solve complex cryptographic problems.

Fundamentals of Bitcoin mining

Bitcoin mining works through specialized equipment that performs millions of calculations per second to find a specific hash value. This process not only verifies the transactions made on the network but also protects the system against possible attacks and manipulations.

When a miner correctly solves the mathematical problem, they gain the right to add a new block to the chain and receive a reward in the form of newly created bitcoins, in addition to the fees from the transactions included in that block.

Mining Technology and Equipment

In 2025, Bitcoin mining requires specialized hardware known as ASIC (Application-Specific Integrated Circuits), designed exclusively for processing mining algorithms. The energy efficiency of these devices is measured in joules per terahash (J/TH), with the current standard being approximately 28 J/TH.

The main factors that determine the profitability of a mining operation include:

The hash power (hashrate) of the mining equipment
The electricity consumption
The cost of electricity
The difficulty of the Bitcoin network
The current price of Bitcoin

Environmental impact and current trends

According to recent data, approximately 54% of Bitcoin mining uses renewable energy sources, representing a significant advance in the sustainability of the sector. This shift responds to both economic considerations and the growing global regulatory pressure.

In the United States, where much of the mining activity is concentrated, the average electricity cost for mining operations is $0.13 per kWh according to data from April 2025. Regions like Texas experience interruptions in the power grid due to the high demand generated by data centers and mining facilities.

Optimization of mining operations

To maximize profitability in Bitcoin mining, industry professionals implement various strategies:

Firmware adjustment: Techniques such as undervolting and overclocking allow finding the optimal point of energy efficiency.
Proper thermal management: An efficient cooling system prevents overheating and prolongs the lifespan of the equipment.
Strategic selection of mining pools: Different pools offer various payment schemes and fees that can significantly impact profitability.

In the current landscape, many mining companies are diversifying their business models to mitigate market volatility and capitalize on opportunities in emerging industries such as artificial intelligence.

Regulatory Perspectives

Compliance with ESG standards (Environmental, Social, and Governance) has shifted from being a voluntary initiative to a fundamental requirement for Bitcoin mining operations seeking institutional investment, banking partnerships, and listing on public markets.

This new regulatory environment, along with technological advancements and market evolution, defines the Bitcoin mining ecosystem in 2025, a sector that continues to adapt and evolve in the face of economic and environmental challenges.