Your ASIC miner sits in the corner of your garage, fans spinning, pulling 2,500 watts from the wall around the clock. It's computing trillions of hashes every second. But what is it actually doing? And what happens in the fraction of a second when one of those hashes turns out to be the winning one?
Most mining guides skip this part or bury it in jargon. In this post we're going to walk through the entire process — from the moment your miner starts working on a new block template to the moment the block reward lands in your wallet — in plain language, step by step.
Step 1: Your Miner Receives a Job From the Pool
Your miner doesn't decide what to mine on its own. It receives instructions — called a "block template" or "job" — from your mining pool (or directly from a Bitcoin node if you're solo mining).
This job contains several key pieces of information: a list of pending Bitcoin transactions pulled from the mempool, the hash of the previous block in the chain, a Merkle root (a cryptographic fingerprint of all the transactions bundled together), a timestamp, and a difficulty target. The difficulty target is the critical number — it defines how small your output hash needs to be to count as a valid block.
If you're interested in how that target gets set, our mining difficulty explainer covers the mechanics in detail.
Step 2: The Hashing Begins
Now your miner goes to work. Its job is conceptually simple: take the block header data, add a number called a "nonce" (number used once), and run the whole thing through the SHA-256 hash function — twice.
The output is a 64-character hexadecimal string. It looks something like this:
0000000000000000000452a38a7c3c3b1e4f5d6a...
If the resulting hash is numerically below the difficulty target, the block is valid. If it's above the target — which it almost always is — the miner increments the nonce by one and tries again. And again. And again.
A modern ASIC like the Antminer S21 Pro at 234 TH/s is performing 234 trillion of these attempts every single second. The Antminer S21 does 151 trillion. Even a tiny Bitaxe Gamma 602 at 1.2 TH/s is still cranking out 1.2 trillion guesses per second.
Every single one of those hashes produces a completely unpredictable output. There's no way to get closer to the target — each attempt is an independent lottery ticket with identical odds.
Step 3: The Nonce Space Runs Out
Here's something most people don't realise: the nonce is only a 32-bit number, which means it has about 4.3 billion possible values. A 234 TH/s miner exhausts the entire nonce space in a fraction of a millisecond. So how does it keep hashing?
The miner (or the pool) modifies other parts of the block header to create fresh input data. The most common technique is changing the "extra nonce" — a value embedded inside the coinbase transaction that alters the Merkle root, which in turn changes the block header entirely. This gives the miner a functionally unlimited number of unique inputs to hash.
If you're using Stratum V2, your miner has more control over which transactions are included and how the block template is constructed, giving it even more flexibility in generating unique work.
Step 4: A Share vs a Block
This is where pool mining and solo mining diverge.
If you're mining in a pool, the pool sets a much lower difficulty target for "shares." A share is a hash that's below the pool's easier target but not necessarily below Bitcoin's network target. Every time your miner finds a share, it sends it to the pool as proof of work done. The pool uses these shares to calculate your contribution and distribute payouts proportionally.
The payout method — PPS, FPPS, or PPLNS — determines exactly how your shares translate into bitcoin. With PPS and FPPS, you get paid a fixed amount per share regardless of whether the pool actually finds a block. With PPLNS, your payout depends on the pool finding blocks.
If you're solo mining with a device like the NerdQX or Avalon Nano 3S, shares don't exist in the same way. Your miner is searching for the real network target. Every hash is a genuine attempt at a full block. The odds are astronomically low — we covered the realistic probabilities in our Bitaxe Gamma review — but if it hits, the entire block reward is yours.
Step 5: The Winning Hash
Now imagine the moment. Out of trillions upon trillions of attempts, one hash comes back below the network difficulty target. The output might look something like:
00000000000000000002a1b3c4d5e6f7...
All those leading zeros aren't decorative — they're the visual signature of an extremely rare, extremely small number. The more leading zeros required, the harder the puzzle. As of mid-2026, valid block hashes need roughly 19–20 leading hexadecimal zeros.
Your miner's firmware detects this instantly. The ASIC chip that computed the winning hash flags it, the control board verifies it, and within milliseconds the result is packaged and transmitted.
Step 6: Broadcasting to the Pool (or Network)
If you're pool mining, your miner sends the winning share to the pool server. The pool validates it, realises this share also meets the full network difficulty, and immediately broadcasts the complete block — including all the transactions and the valid header — to the Bitcoin network.
If you're solo mining via something like solo.ckpool.org, your winning solution is relayed directly to the Bitcoin network through the pool's connected node.
Speed matters here. If two miners find valid blocks at roughly the same time (called a "race condition"), the block that propagates to more nodes first generally wins. The other becomes an "orphan" — valid but ultimately discarded. This is one reason why a wired Ethernet connection is preferred over Wi-Fi for mining: lower latency means your solution reaches the network faster.
Step 7: Network Validation
When Bitcoin nodes around the world receive your block, each one independently validates it. They check that every transaction in the block is legitimate (no double spends, valid signatures), that the block header hashes correctly, that the hash meets the current difficulty target, and that the block follows all consensus rules.
This validation takes fractions of a second. If everything checks out, nodes add the block to their copy of the blockchain and start relaying it to their peers. Within 10–30 seconds, the majority of the network has accepted your block.
Step 8: The Block Reward
Embedded within the block is a special transaction called the "coinbase transaction." This is where new bitcoin is created. As of the April 2024 halving, each block creates 3.125 BTC. This reward — plus all the transaction fees from the transactions included in the block — goes to the address specified in the coinbase transaction.
If you're pool mining, that address belongs to the pool. The pool then distributes your share of the reward based on the contribution your shares represent. If you're solo mining and your machine found the block, the full reward goes directly to your configured wallet address.
At current BTC/AUD prices, a single block reward is worth a substantial amount. For context on what that means for your specific setup and electricity costs, our home mining profitability guide walks through the real numbers.
Step 9: Confirmation and Maturation
The block reward doesn't become spendable immediately. Bitcoin requires the coinbase transaction to "mature" — meaning 100 additional blocks must be mined on top of yours before the reward can be moved. At roughly 10 minutes per block, that's about 16–17 hours.
This maturation period exists to protect against chain reorganisations. If your block were to be orphaned by a competing chain within the first few blocks, the reward would vanish. After 100 confirmations, the probability of a reorg is essentially zero.
For pool miners, this maturation delay is handled by the pool. Most pools credit your account with pending balance immediately and release it after sufficient confirmations, depending on their payout policy.
The Full Sequence in 30 Seconds
Here's the entire lifecycle compressed:
- Pool sends your miner a block template with transactions, previous block hash, and difficulty target.
- Your miner hashes the block header with different nonces at trillions of attempts per second.
- When the nonce space runs out, the extra nonce is incremented to generate a fresh header.
- Your miner sends partial solutions (shares) to the pool as proof of work.
- One hash comes back below the network difficulty target — the block is solved.
- The solution is broadcast to the network within milliseconds.
- Nodes worldwide validate the block independently.
- The 3.125 BTC block reward plus transaction fees are created in the coinbase transaction.
- After 100 confirmations (~17 hours), the reward matures and becomes spendable.
Why This Matters for Your Setup
Understanding this process isn't just academic. It directly informs practical decisions about how you mine:
It's why overclocking for higher hashrate improves your odds proportionally — more hashes per second means more lottery tickets. It's why firmware choice matters — better firmware reduces wasted work and rejected shares. It's why network latency and network reliability affect your effective hashrate — if your solution arrives late, someone else gets the block.
And it's why the economics of mining ultimately come down to one ratio: the cost of the electricity powering all those hash attempts versus the value of the rewards those attempts produce. Our guides on state-by-state electricity rates and getting cheaper power are the practical extension of the physics we've covered here.
Whether you're running a full-scale Bitcoin ASIC in a dedicated room or a Lucky Miner LV06 on your desk for fun, the fundamental process is identical. The only difference is scale — and odds.
