What is crypto mining?
Miners compete to keep the ledger.

What are miners actually doing?

Remember the public ledger from chapter 2? About every 10 minutes the bitcoin network picks someone to write the next page. It does this by having computers race to solve a hard math puzzle. The winner writes the block and earns newly created bitcoin. That’s mining.

• Mining rigs: machines built only for this puzzle; laptops and phones stopped being competitive long ago.
• Hashrate: how many guesses per second. The higher the network total, the smaller each rig’s share.
• Block reward: 3.125 BTC per block since the April 2024 halving, plus transaction fees.
• Costs: mostly hardware and electricity. When price falls below cost, miners lose money.

Proof of work vs proof of stake: is staking mining?

Staking isn’t mining, though it’s sometimes marketed as “staking mining”. Staking on an exchange means lending your coins to validation or lending, with the same price and platform risks.

Is crypto mining legal? Can you mine at home?

It depends heavily on where you live. Many countries allow mining but regulate power use and tax the income. Mainland China has cracked down since 2021, and a February 6, 2026 notice from eight regulators orders provinces to shut existing mining projects and allow no new ones, and bans rig makers from selling mining services.

• Residential power used for mining can trigger penalty rates and enforcement where mining is restricted.
• Using an employer’s or school’s power and equipment has led to prosecutions in several cases.
• At home, check electricity costs honestly: most home setups can’t cover the power bill.

Is phone mining real?

Bitcoin’s total hashrate is astronomical; a phone would never win a single block. So “mining apps” aren’t mining bitcoin at all. They hand out the project’s own points or tokens. Typical patterns:

• Tap once a day to “mine”, and mine faster if you invite friends: a referral scheme.
• The coins can’t be sold until a “mainnet launch” or “big exchange listing” that takes years.
• You’re asked to upload ID, and your personal data may be used for other purposes.
• Later, “boosters” or “mining cards” require payment to mine more.

Is Pi Network legit?

Pi is the best-known phone mining project. It did open its mainnet on February 20, 2025, and exchanges including OKX listed PI for spot trading. But the price has disappointed: according to Sina Finance, PI briefly neared $3 days after launch, then fell about 90%, trading around $0.20 for most of 2026.

Why cloud mining is usually a scam

“No rig needed, just buy our hashrate and earn coins daily” is the classic cloud-mining pitch. The problems:

1. The math doesn’t work: if mining were that reliably profitable, the platform would mine for itself instead of selling to you.
2. Nothing can be verified: the “output” is just a number in their dashboard. You can’t see if any machines exist.
3. Classic Ponzi structure: new deposits pay earlier users until the money stops and the site vanishes.