Understanding the incentives that secure Bitcoin
⚠️ Note: Network statistics (difficulty, hashrate) are estimates based on data from November 2024. For current live data, visit mempool.space or blockchain.info.
Bitcoin miners spend electricity and buy expensive computers to secure the network. Why? Because they earn rewards! Every time a miner successfully adds a block to the blockchain, they receive newly created Bitcoin plus transaction fees.
Bitcoin's security model relies on economic incentives. Miners invest in hardware and electricity because block rewards + transaction fees make honest mining more profitable than attacking the network. The halving schedule creates programmatic scarcity.
Bitcoin implements a self-regulating economic system where security is purchased with inflation (block subsidy) that decreases over time. Game theory ensures attacking (double-spend, censorship) is less profitable than honest mining due to opportunity cost + network value destruction. Post-subsidy era (2140+) transitions to pure fee market.
Every ~10 minutes, one miner wins approximately $327,500! Block value = (Block Subsidy + Fees) × BTC Price = $327,500 Expected block value = 3.275 BTC × $100,000 = $327,500 | Daily network issuance ≈ 450 BTC ($45M)
Enter your details to see if mining would be profitable: Calculate expected returns based on hashrate and electricity costs: Model mining profitability accounting for difficulty, hashrate competition, and operational costs:
Every 4 years, the block reward gets cut in half. This makes Bitcoin scarcer over time. Block subsidy halves every 210,000 blocks (~4 years), creating programmatic scarcity: Halving enforces asymptotic supply cap of 21M BTC via geometric series: Σ(50/2^n × 210000) = 21M