Skip to content

Lesson 3 · 2 min · Intermediate

How proof-of-work mining works, and the arms race

On this page

How proof-of-work mining actually works

A miner takes a block header (prev hash, transactions, timestamp) and repeatedly changes a , hashing the whole thing with SHA-256 until the output is below the network target — i.e. it starts with enough leading zeros. The first miner to find a valid hash broadcasts the block and earns the plus fees. The network’s retargets periodically so the average block time stays constant regardless of how much joins or leaves.

One digit, a whole new hash

INPUTHASHblock 904,113 · nonce 41block 904,113 · nonce 42SHA-25627fed9162d6b3ac5a2f88536ab50296d2042dbde7d5ee0cc1 character differs22 of 24 characters differ
Change one digit of the input and the hash changes completely. A miner can’t steer toward a valid hash, so the only way to find one is to keep trying nonces.
Try it yourself

Open the Hash Hunt lab → Race to find an input whose SHA-256 starts with N zeros and feel how each extra zero multiplies the work — that’s the core of PoW difficulty.

The arms race: CPU → GPU → FPGA → ASIC

  • CPU (2009) — Satoshi mined the genesis block on a regular CPU.
  • GPU (2010–11) — graphics cards parallelize hashing far better than CPUs.
  • FPGA (2011) — field-programmable chips beat GPUs on efficiency.
  • (2013–present) — application-specific chips built for one algorithm dominate. Bitcoin is now mined almost exclusively on SHA-256 ASICs.

Why ASICs dominate Bitcoin: SHA-256 is simple and stable, so a chip built only to do SHA-256 is orders of magnitude more efficient than a general-purpose computer. ASIC resistance (e.g. Ethash, RandomX) tries to make specialized hardware less advantageous so commodity hardware can still compete — survives on such algorithms (Ravencoin, pre-Merge Ethereum); Kaspa, once GPU-mined, has since moved to dedicated kHeavyHash ASICs.

Educational only, not financial or legal advice.