Mining

Mining is the process of using computational power to validate transactions and add new blocks to a proof-of-work blockchain like Bitcoin. Miners run specialized hardware (ASICs) that solve cryptographic puzzles; the first to solve each block earns the block reward (currently 3.125 BTC plus transaction fees on Bitcoin) and adds a new block to the chain.

For non-miners, mining matters mostly as a security mechanism — it's what protects Bitcoin against fraud and attacks. Mined Bitcoin counts as ordinary income at the fair market value on receipt for U.S. tax purposes.

Why it matters for Milo customers

If you're a Bitcoin miner with significant accumulated holdings, you have a complex cost basis profile — every mining event creates a new tax lot at the day's price. Milo's crypto-backed products are particularly useful here: borrow against the holdings without realizing the gains across hundreds of small lots.

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