Mining glossary

Each term is defined in a single sentence that stands on its own, then linked to the guides that use it. Inside a guide, the first mention of any term here links back to its definition.

34 terms

A

ASICASIC miner, application-specific integrated circuit: An ASIC (application-specific integrated circuit) is a chip designed to compute one hash function and nothing else, and ASIC miners built around such chips are the only hardware that mines SHA-256 coins like Bitcoin competitively.

B

Block header: The block header is the 80-byte summary of a block that miners actually hash, containing the previous block's hash, a Merkle root committing to the block's transactions, a timestamp, the difficulty target and the nonce.
Block rewardcoinbase reward: The block reward is the total bitcoin a miner collects for a block, made up of the fixed block subsidy of newly issued coins plus the transaction fees paid by every transaction included in that block.
Block subsidysubsidy: The block subsidy is the newly created bitcoin issued to the miner of each block, set at 3.125 BTC since the April 2024 halving and due to fall to 1.5625 BTC at the next halving around 2028.
Block timeblock interval: Block time is the interval between consecutive Bitcoin blocks, which the difficulty adjustment targets at ten minutes on average, or about 144 blocks a day, although individual intervals vary widely.
Break-even electricity pricebreakeven electricity price, break-even power price: The break-even electricity price is the highest cost per kilowatt-hour at which a specific machine's daily mining revenue still covers its daily power cost, so a miner paying more than that figure loses money on every kilowatt-hour.

D

Difficulty adjustmentretarget, difficulty retarget, epoch: The difficulty adjustment is Bitcoin's recalculation of network difficulty every 2,016 blocks, about two weeks, raising it when the previous blocks arrived faster than ten minutes apart and lowering it when they arrived slower, capped at a factor of four in either direction.

E

Empty block: An empty block is a block containing only the coinbase transaction, typically mined in the seconds after a previous block when a pool has learned the new block's hash but not yet assembled a fresh set of transactions.

F

FPPSfull pay per share, full pay-per-share: FPPS (full pay per share) is a payout scheme that pays the PPS rate for the block subsidy plus a proportional share of the average transaction fees earned per block, so miners receive fee revenue without bearing block-finding variance.

H

Halvinghalvening: The halving is the scheduled event every 210,000 blocks, roughly four years, at which Bitcoin's block subsidy is cut in half, most recently from 6.25 BTC to 3.125 BTC in April 2024.
Hashpricehash price: Hashprice is the expected daily mining revenue per unit of hashrate, usually quoted in dollars per terahash per second per day, and it rises with the bitcoin price and transaction fees and falls as network difficulty grows.
Hashratehash rate, TH/s, PH/s, EH/s: Hashrate is the number of hash attempts a miner or the whole network performs per second, quoted in terahashes (TH/s), petahashes (PH/s) or exahashes (EH/s), and it determines a miner's expected share of block rewards.
Hostingcolocation, hosted mining: Hosting is an arrangement in which a facility operator houses, powers and maintains machines the miner owns in exchange for an all-in electricity rate or monthly fee, in place of the miner running them at home.

J

Joules per terahashJ/TH, efficiency, W/TH: Joules per terahash (J/TH) is the efficiency measure for a mining machine, equal to its power draw in watts divided by its hashrate in TH/s, so a lower figure means less electricity for the same expected revenue.

K

Kilowatt-hourkWh: A kilowatt-hour (kWh) is the unit electricity is billed in, equal to one kilowatt drawn for one hour, so a machine rated at 3,500 watts uses 3.5 kWh every hour and 84 kWh a day.

M

Mempoolmemory pool: The mempool is each node's holding area for valid transactions that have been broadcast but not yet included in a block, from which miners select the transactions that pay the highest fee per byte.
Mining poolpool: A mining pool is a service that combines the hashrate of many miners, submits blocks on their behalf and splits the resulting block rewards according to the work each miner contributed, turning rare large payouts into small frequent ones.

N

Network difficultydifficulty, mining difficulty: Network difficulty is the number that sets how hard it is to find a valid Bitcoin block, adjusted every 2,016 blocks so that blocks keep arriving roughly every ten minutes as total hashrate changes.
Nonce: The nonce is a 32-bit field in the block header that a miner changes between hash attempts so that each attempt produces a different hash, with the extra nonce in the coinbase transaction providing more room once the 4.3 billion values run out.

O

Orphan blockorphaned block, stale block: An orphan block, more precisely a stale block, is a valid block that loses out to a competing block found at nearly the same time, so its reward is never spendable and a pool that mined it earns nothing for that round.

P

Payback periodROI period: The payback period is the time it takes a machine's cumulative operating profit to repay its purchase and setup cost under stated assumptions about price, difficulty and electricity, and it has no meaning when the machine runs at a loss.
Payout thresholdminimum payout: A payout threshold is the minimum balance a miner must accumulate before a pool sends a payment, set by the pool to keep on-chain transaction costs small relative to the amounts paid.
Pool feepool fees, mining fee: A pool fee is the percentage of mining rewards a pool keeps for running the service, commonly between 0% and 4% where operators publish it, with PPS and FPPS pools tending to charge more than PPLNS pools because they carry the variance.
PPLNSpay per last N shares, pay-per-last-N-shares: PPLNS (pay per last N shares) is a payout scheme that distributes each block the pool actually finds among the shares submitted in a window before that block, so miners bear the pool's luck and a miner who leaves shortly before a block forfeits some of the reward.
PPSpay per share, pay-per-share: PPS (pay per share) is a pool payout scheme that pays a fixed amount for every accepted share, calculated from the expected value of that share at the current difficulty, so the pool absorbs all the variance and usually charges a higher fee for doing so.
Proof of workPoW: Proof of work is the consensus mechanism in which miners repeatedly hash candidate block headers until one produces a value below the network's current target, making each new block expensive to produce and cheap to verify.

S

SHA-256SHA256: SHA-256 is the cryptographic hash function Bitcoin uses for proof of work, producing a fixed 256-bit output from any input so that the only way to find a valid block is to try inputs one after another.
Shareshares, accepted share: A share is a hash a miner submits to a pool that meets the pool's own easier target rather than the network's, serving as verifiable proof of the work the miner has done so the pool can measure each miner's contribution.
Solo miningsolo: Solo mining is mining without a pool, or through a solo pool that passes the whole block reward to whichever miner finds the block, so the miner keeps everything but may wait months or years between payouts.
Stale sharestale, rejected share: A stale share is a share submitted after the pool has already moved on to a new block, usually because of network latency, and it earns nothing because it no longer contributes to a block the pool can still find.
StratumStratum V1, Stratum V2: Stratum is the protocol miners use to receive work from a pool and submit shares back, with Stratum V2 adding encryption and an optional mode in which miners rather than the pool choose which transactions go into a block.

T

Transaction feesfee revenue, fees: Transaction fees are the amounts users attach to Bitcoin transactions to have them included in a block, collected by the miner of that block on top of the subsidy and forming a growing share of mining revenue as the subsidy shrinks.

U

Uptime: Uptime is the percentage of time a mining machine is actually hashing, and because mining revenue accrues only while a machine is working, every hour offline is revenue that cannot be recovered later.

V

Varianceluck, pool luck: Variance in mining is the gap between the blocks a miner or pool statistically expects to find and the blocks it actually finds over a period, which pools report as luck and which shrinks as a proportion of income as hashrate and time increase.