Recently, many friends have asked me, what does mining mean? How can you make money through mining? Actually, this question is quite common, so today I want to have a good chat with everyone about Bitcoin mining.

First of all, the concept of mining sounds mysterious, but the principle is actually not complicated. Simply put, transactions on the Bitcoin network need to be recorded and verified, and this work is done by miners. Miners use specialized equipment (mining machines) to solve a very difficult math problem; whoever solves it first can package a new block and receive a system reward. This is what is called the "proof of work" mechanism.

So what does mining mean? From another perspective, it’s the process where miners compete through computing power to earn the right to record transactions and receive rewards. Currently, the total network hash rate of Bitcoin has exceeded 580 EH/s. How big is this number? What does it indicate? It shows that relying on a single device to mine is basically a pipe dream.

Here, I want to mention three important concepts. Mining machines are high-performance computers specifically used for mining, with CPUs and GPUs far surpassing ordinary computers. Miners are the people operating these mining machines. Mining pools are platforms that pool together the computing power of many individuals. In the early days, a regular computer could mine, but now? Only professional ASIC mining machines are competitive.

Looking at the evolution, the answer to what mining means has been constantly changing. From 2009 to 2012, CPU mining was sufficient; in 2013, it shifted to GPU graphics cards; later, ASIC chips completely dominated the market. Meanwhile, the form of mining has also changed—from individual solo mining to now joining mining pools to work together, which is a very clear trend.

Miners’ income comes from two sources: one is the BTC reward received after successfully mining a block (this reward halves every four years, from 50 BTC down to the current 3.125 BTC); the other is transaction fees, which are the fees paid by users.

So, can you still make money through mining now? Honestly, the opportunity for individual mining has become very slim. You need to invest $1,000–$2,000 or even more to buy mining equipment, plus bear the electricity and maintenance costs. Most importantly, even if you buy a mining machine, mining solo will hardly earn any coins because your hash rate is tiny compared to the entire pool. So what does mining mean now? For most individuals, it has evolved into a high-investment, low-return activity.

But that doesn’t mean individuals have no chance at all. In theory, anyone can participate in mining by joining a mining pool to share the rewards. But in reality, if your hash rate is too low, even if you mine coins, the amount will be pitifully small, barely covering costs. This is also why mining is increasingly concentrated among large capital and big mining farms.

If you’re interested in cryptocurrencies but don’t want to invest such large costs, there are actually other ways. For example, trading spot or derivatives on exchanges—this way, there’s no need for mining equipment, and you don’t have to worry about electricity costs. You can go long or short based on market conditions at any time. This method might be more practical for small funds.