Bitcoin mining is how new Bitcoins are created and transactions are verified on the Bitcoin network. It’s a vital process that keeps Bitcoin secure and decentralized. Here’s a simple breakdown:

Miners use specialized hardware to perform a particular cryptographic operation called hashing, competing to be the first to find a valid hash. Nodes verify the block’s validity before adding it to the blockchain. The winning miner earns newly minted Bitcoin (block subsidy) along with transaction fees.

• Transactions: When someone makes a Bitcoin transaction, it’s broadcasted with the entire network. 
• Block Formation: Miners collect these transactions into a block, which is like a digital container. Each block also contains a reference to the previous block, forming a chain of blocks, hence the term “blockchain.”
• Proof of Work (PoW): Bitcoin uses a consensus mechanism called Proof of Work. Miners compete to solve a complex mathematical puzzle based on the transactions in the block.
• Mining Process: Miners use specialized hardware to perform a particular cryptographic operation called hashing which is like solving a puzzle. The first miner to solve the puzzle adds the block to the blockchain and earns new Bitcoins as a reward. This reward decreases over time through an event called “halving” until all 21 million Bitcoins are mined.
• Verification and Consensus: Once a miner finds a valid hash, they broadcast it to the network. Other miners verify to ensure it’s correct. Once a majority of miners agree that the block is valid, the block is added to the blockchain, and the transactions within it are considered confirmed.
• Difficulty Adjustment: To keep block creation steady, the network adjusts the puzzle’s difficulty every 2016 blocks, making sure a new block is added roughly every 10 minutes, regardless of how much computational power is devoted to mining.

In short, Bitcoin mining is a decentralized process where miners compete to validate transactions and secure the network, earning rewards in return. This process ensures Bitcoin operates smoothly without needing a central authority.

Visualization of the mining process (source: Digital Mining Solutions)