What Mining Really Is
Before you buy anything, you need to know what a miner actually does. It is simpler than it sounds, and knowing it keeps you from getting fooled.
What the machine is really doing
The miner is not solving a puzzle with brains. It is guessing a number over and over, trillions of times a second, until it hits one that counts as the winner for that round. First machine in the world to hit it gets to add the next page to the shared record and collects the reward.
Where the pay comes from
- New Bitcoin. The round winner is handed a batch of brand-new Bitcoin. This is the only way new coins are born.
- Fees. The winner also scoops up all the little fees people attached to the payments on that page.
That batch of new Bitcoin gets cut in half roughly every four years (the "halving"), so over time fees matter more and more.
Why farms exist
One machine almost never wins the raffle by itself: the competition is the entire planet. So people do two things. They run many machines together (a farm), and they join a pool so lots of small miners share winnings (Step 5). Big farms also chase the one thing that decides profit: cheap electricity (Step 3).