Blocks, Sweat, and Sats – A Crypto Mining Glossary

Table of contents

• Hashrate is just raw guessing speed, and it only pays if difficulty, block rewards and your power costs line up.
• Mining difficulty constantly moves to hold block times near the protocol target, so your fixed hardware gets squeezed whenever network hashrate climbs.
• Block rewards are split into subsidy and fees, and over time halvings push miners to rely more on fees and efficient machines than on new coin issuance.
• Pools, shares and payout schemes decide how your slice of block rewards hits your wallet, even though the underlying proof-of-work is the same.
• Every mining term in the glossary connects back to the question of does this setup make more in block rewards than it burns in electricity and hardware decay.

Mining Concepts

Mining

Using hardware to run a proof-of-work algorithm over and over, validate transactions, and bundle them into blocks. Miners compete to find a valid hash first and whoever wins gets the block reward. Mining is both a security mechanism for the network and a business that lives or dies on power costs and hardware efficiency.

Block

A block is a batch of confirmed transactions plus metadata. It links to the previous block through a hash, which creates the blockchain. Each block also includes a coinbase transaction that pays the miner.

Block Header

Small piece of data that miners actually hash. It includes things like the version, previous block hash, Merkle root, timestamp, difficulty bits (nBits), and nonce. Changing almost anything in the header changes the resulting hash completely.

Block Height

The position of a block in the chain, counted from the genesis block. If Bitcoin is at height 870,000, that means 870,000 blocks (including genesis) are in the longest valid chain.

Block Time

The average time between blocks on a network. Bitcoin targets around 10 minutes, Litecoin around 2.5 minutes. Actual times fluctuate short term and difficulty adjustments try to pull the average back toward target.

Genesis Block

The first block in a blockchain. It is hardcoded into the node software, has no previous block, and anchors the entire chain.

Hash, Hashrate, Difficulty

Hash

Output of a cryptographic hash function like SHA-256. The output looks random, has fixed length, and changes completely if the input changes even a tiny bit. Miners keep generating hashes until one falls below the network target.

Hashing

The act of feeding data (the block header) into the hash function repeatedly. Mining software constantly hashes and tweaks the nonce and other fields to produce new candidate hashes.

Hashrate / Hash Power

The speed at which a miner or network performs hashes, usually measured in hashes per second. Examples: a single ASIC might do 200 TH/s, while the Bitcoin network sits in the exahash (EH/s) range. Higher hashrate gives a higher chance to find blocks, but profit still depends on difficulty, power cost, and block reward.

Network Hashrate (Nethash / Net Hashrate)

The total hashrate of all miners on a specific coin’s network. Pools and explorers estimate it from recent block times and difficulty. A rising network hashrate usually means more competition for the same block reward.

Difficulty / Mining Difficulty

A number that defines how hard it is to find a valid block hash. The protocol adjusts difficulty so that blocks come in near the target time. Higher difficulty means miners must try more hashes on average to find a block.

Difficulty Adjustment

The regular recalculation of difficulty by the protocol. Bitcoin adjusts every 2,016 blocks based on how fast those blocks were found. If blocks came in too fast, difficulty goes up; if they were too slow, difficulty drops.

Target

The numerical threshold a valid block hash must be below. Difficulty and target are linked: higher difficulty means a lower target, which makes valid hashes rarer. Miners do not see the target directly in decimal; they work with the compact “nBits” form in the header.

Nonce

A 32-bit value in the block header that miners change to produce different hashes. Once all nonce values are tried, software can change other fields (like extra nonce in the coinbase transaction) to keep searching.

Rewards, Fees, and Economics

Block Reward

Total payout a miner receives for a valid block. It combines the block subsidy (new coins) and all transaction fees included in that block. In pooled mining, the pool collects the block reward and then distributes it to participants.

Block Subsidy

The portion of the block reward that comes from new coins created with each block. In Bitcoin, the subsidy started at 50 BTC and halves roughly every four years. The halving schedule caps the total supply at 21 million.

Transaction Fees

Fees that users attach to transactions so miners include them sooner. The miner who mines the block collects these fees on top of the subsidy. Fee markets heat up when the mempool is crowded, which can temporarily boost miner revenue.

Mining Reward / Mining Rewards

Generic term for everything a miner earns from mining activity. That usually means block subsidy plus transaction fees, and sometimes extra mechanisms on other chains (like MEV, side rewards, etc.).

Halving / Halvening

Scheduled event in Bitcoin where the block subsidy cuts in half after every 210,000 blocks. This reduces new coin issuance and gradually makes transaction fees more important to miner revenue.

Fee Rate (sat/vByte, gwei, etc.)

Fee per unit of transaction “size” or gas. In Bitcoin, wallets usually talk about satoshis per virtual byte (sat/vByte). In Ethereum-style systems, gas price is often quoted in gwei. Miners prioritise higher fee rate transactions because they fill limited block space more profitably.

Mempool

Short for “memory pool.” It is the set of unconfirmed transactions stored by nodes. Miners pick transactions from their mempool when building a new block, often starting from the highest fee rate ones.

Gas Limit

On Ethereum-style chains, each transaction and block has a gas limit. It caps how much computation can be executed. For miners or validators on those systems, the gas limit defines how much fee-paying activity fits in a block.

Gas Price

Amount a user is willing to pay per unit of gas, usually in gwei. Higher gas price means a transaction is more likely to be included quickly because it pays more to the block producer.

Gwei

Unit equal to one billion wei, used as a common unit for gas prices on Ethereum and similar chains. 1 gwei = 0.000000001 ETH.

Hardware and Devices

ASIC (Application-Specific Integrated Circuit)

Chip designed for a single algorithm like SHA-256. ASICs run that algorithm extremely fast and efficiently compared to general hardware. In Bitcoin, ASICs completely replaced GPU and CPU miners.

Antminer

Brand name for Bitmain’s ASIC miners. Models like the S19 or S21 are common in Bitcoin farms. People often use “Antminer” to refer to the full device, not just the chip.

GPU (Graphics Processing Unit)

Graphics card used for rendering games and compute tasks. GPUs became popular for mining early Bitcoin and many altcoins. They offer flexible hashing across different algorithms, but lose to ASICs on algorithms where specialised machines exist.

GPU Mining

Mining that uses GPUs to process proof-of-work for coins that are GPU-friendly or ASIC-resistant. This is common in smaller PoW networks where ASICs either do not exist yet or are discouraged.

CPU Miner / CPU Mining

Mining using the main processor of a computer. This was viable at the very beginning of Bitcoin but is now mostly limited to niche CPU-friendly algorithms like RandomX (e.g. Monero).

FPGA (Field-Programmable Gate Array)

Reconfigurable chip that can be tailored to different algorithms in hardware. In mining, FPGAs sat between GPUs and ASICs in efficiency. They are now niche because modern ASICs dominate most profitable algorithms.

Mining Rig / RIG

A complete mining system. For GPUs, that means motherboard, multiple cards, risers, power supplies, and cooling. For ASICs, each standalone miner is often called a rig as well.

Mining Farm

Large-scale facility filled with many rigs or ASICs. Farms usually operate in places with cheap electricity and suitable climate and invest heavily in power distribution and cooling.

Riser / Riser Card

PCIe extender that lets you connect a GPU to the motherboard while physically placing it away from the slot. Risers help with spacing, cooling, and building open-frame GPU rigs.

J/TH (Joules per Terahash)

Key efficiency metric for Bitcoin miners. It measures how much energy in joules the machine uses to produce one terahash of work. Lower J/TH means cheaper hashes and better chances of staying profitable when margins tighten.

Thermal Throttling

Automatic reduction of chip speed when temperatures get too high. Drivers or firmware cut clocks or power to prevent damage. In mining, throttling reduces hashrate and usually means cooling or power settings are not tuned properly.

LHR (Lite Hash Rate)

Limiter introduced by Nvidia on some RTX 30-series GPUs to cut hashrate for certain algorithms like Ethash. The idea was to discourage miners from hoarding gaming GPUs, although miners worked around many of these limits.

Overclock

Running a chip above its default clock speed. Miners overclock core or memory to squeeze more hashrate at the cost of more power and heat. Bad overclocks often cause invalid or stale shares and reduce stability.

Core Clock / Memory Clock / Power Limit

Tunable settings that control GPU or ASIC behaviour. Core clock affects calculation speed, memory clock influences memory-bound algorithms, and power limit caps the maximum power draw. Proper tuning balances hashrate, efficiency, and temperatures.

Algorithms and Coins

Proof-of-Work (PoW)

Consensus method where participants prove they spent computation by finding valid hashes under a target. Nodes easily verify the proof. The cost of mining attacks grows with the amount of honest hashrate on the network.

Mining Algorithm

Specific proof-of-work function a coin uses, such as SHA-256, Scrypt, Ethash, KawPoW, or RandomX. The algorithm determines which hardware performs best and whether ASICs can dominate.

SHA-256

Hash function used by Bitcoin and several other coins. ASICs are highly optimised for SHA-256, which makes general hardware uncompetitive.

Scrypt

Memory-hard algorithm used by Litecoin, Dogecoin and others. It was designed to be more resistant to early ASICs, but dedicated Scrypt ASICs now exist.

Ethash

Memory-hard algorithm that Ethereum used before moving to proof-of-stake. Many GPU miners used it, and some forks and related coins still do.

ASIC-Resistant

Design goal for some algorithms that try to minimise the advantage of ASICs. These algorithms typically rely on memory hardness or frequent changes to keep GPUs or CPUs relevant, although true resistance is debatable.

Altcoin

Any cryptocurrency that is not Bitcoin. Some altcoins run their own PoW networks and are mineable; others use proof-of-stake or other systems.

Blocks, Structure, and Protocol Details

Merkle Root

Hash that represents all transactions in a block. Nodes build a Merkle tree from transaction hashes and store only the root in the block header. This allows efficient proof that a transaction is included in a block.

Block Time Target

Configured average time between blocks. The protocol uses difficulty adjustments to aim at this target while hashrate changes.

Orphan Block / Stale Block

Valid block that did not become part of the longest chain because another block at the same height won the race. The network accepts only one chain head, so one of those blocks loses and its miner gets no reward.

Pools, Shares, and Payouts

Mining Pool

Cooperative group of miners that combine their hashrate to find blocks more frequently and smooth income. The pool collects block rewards and pays miners based on their contributed work.

Share

Proof of work that meets a pool’s lower difficulty target. Shares are easier to find than full blocks and serve to measure how much work each miner contributes.

Stale Share

Share that arrives at the pool after it has already moved on to a new job (new block template). Stale shares do not count for payout because they no longer reflect current work.

Invalid Share

Share that fails basic checks or does not even meet the pool difficulty. Causes include bad overclocks, network errors, or misconfigured miners.

Effort / Luck / Pool Effort

Metric that compares how many shares a pool actually used to find a block to how many were statistically expected. Around 100% effort is “average luck,” below 100% is lucky, above 100% is unlucky in that round.

PPS (Pay Per Share)

Payout model where the pool pays a fixed amount per share submitted, regardless of when blocks are found. This gives miners very stable income while the pool takes on variance risk.

PPS+

Variant of PPS where miners also receive most of the transaction fees associated with blocks the pool finds. Pools usually charge a higher fee for PPS+ because they cover both variance and infrastructure.

PPLNS (Pay Per Last N Shares)

Model that pays miners based on their contribution over the last N shares before a block is found. This favours miners who stay connected over time and reduces pool-hopping incentives.

PROP (Proportional)

Simple method where the block reward is split in proportion to all shares submitted during a round. Rounds are defined from one found block to the next.

Worker

Label for each individual miner or rig inside a pool account. Workers let you see stats per device, like hashrate, shares, and errors.

Stratum

Communication protocol between miners and pools. It sends jobs to miners and receives shares back. Stratum V2 includes improvements like better efficiency and optional features for censorship resistance and job negotiation.

Operations and Configuration

Flight Sheet

Configuration profile in mining operating systems like HiveOS. It defines which coin you mine, which pool you connect to, which wallet address you use, and which miner software runs.

API (Application Programming Interface)

Interface that lets software talk to miners, pools, or monitoring tools. APIs expose stats like hashrate, temperatures, and share counts for dashboards and automation.

Overclocking Profile

Saved combination of clock speeds, voltages, and power limits. Miners create profiles for each coin or algorithm to hit a balance between hashrate, efficiency, and stability.

Monitoring Dashboard

Interface that shows live data for rigs or farms. Typical metrics include hashrate, accepted and rejected shares, device temperatures, fan speeds, and uptime. Good monitoring is critical to catch failing hardware before revenue drops.

Cloud and Remote Mining

Cloud Mining / Mining as a Service / Mining Contract

Setup where you rent hashrate or pre-configured mining power from a provider instead of owning the hardware. The provider runs the machines and you get payouts based on the contract. This model has a long history of scams and misaligned incentives, so it needs heavy due diligence.

Hosting

Service where you own the ASICs, but place them in someone else’s facility. The host provides power, cooling, and sometimes repairs. You pay a hosting fee and usually get direct access to your miner stats and pool settings.

Security and Abuse

Cryptojacking

Illegal or unauthorized mining on someone else’s hardware. Malware or scripts hijack CPU or GPU resources to mine and send rewards to the attacker, while the victim just sees slow systems and higher power bills.

Honeyminer

Old consumer-friendly mining app that let regular users mine with spare PC resources and get paid in Bitcoin. It is mostly legacy now but still appears in mining discussions and older guides.

Frequently Asked Questions (FAQ)

What is hashrate in crypto mining?

Hashrate is the number of hashes your hardware or the whole network can compute per second, and it decides how often you statistically hit a valid block.

How does mining difficulty work in Bitcoin?

Mining difficulty is a number the protocol adjusts so blocks keep arriving around every 10 minutes, making valid hashes rarer when hashrate goes up and easier when hashrate drops.

What is a block reward in Bitcoin or other PoW coins?

A block reward is the payout for mining a block, made up of new coins from the block subsidy plus all transaction fees included in that block.

Is a higher hashrate always more profitable for miners?

Higher hashrate helps you win more blocks, but profit depends on difficulty, power price, hardware efficiency and the size of the block reward.

What is the difference between block subsidy and transaction fees?

Block subsidy is the fixed amount of new coins created in each block, while transaction fees come from users and change with mempool congestion and demand for block space.

Can you still mine crypto with a GPU or CPU in 2025?

You can still mine some altcoins with GPUs and a few CPU-friendly coins, but major SHA-256 networks like Bitcoin are fully dominated by ASICs.

Why do miners join mining pools instead of solo mining?

Miners join pools to smooth out income, trading a tiny chance of a huge solo block for more frequent, smaller payouts based on their contributed shares.

What does “ASIC-resistant” mean in mining algorithms?

ASIC-resistant algorithms try to shrink the advantage of specialised chips so GPUs or CPUs stay competitive, but over time hardware usually adapts if the coin becomes valuable.

What is J/TH and why do miners care about it?

Joules per terahash (J/TH) measures how much energy your ASIC spends for each unit of work, and lower J/TH means better margins when difficulty rises or block rewards shrink.

Are cloud mining contracts worth it for beginners?

Cloud mining can work in rare cases, but many contracts hide the real power costs and risks, and the space is full of scams, so most miners prefer owning or hosting their own hardware.