Bitcoin mining is often mentioned, but how are the transactions it processes finally settled? This process is the cornerstone of Bitcoin's security and functionality. It's not just about creating new coins; it's a sophisticated, decentralized accounting system.

At its heart, Bitcoin mining serves two critical purposes: it introduces new bitcoins into circulation in a controlled manner, and, more importantly, it secures and settles all transactions on the network. Settlement here means the permanent and irreversible confirmation of a transaction.

The settlement process begins when you initiate a Bitcoin transaction. This transaction is broadcast to the peer-to-peer network and gathered into a pool of unconfirmed transactions called the "mempool." Miners, who are nodes with specialized hardware, select transactions from this pool to form a new block.

Their task is to solve an extremely complex cryptographic puzzle, known as proof-of-work. This requires immense computational power as miners compete to find a specific hash value. The first miner to solve the puzzle gets to propose the next block to the network.

This is where settlement truly starts. When the miner broadcasts the new block, other nodes verify its validity. They check the proof-of-work solution and ensure all transactions within the block follow the protocol rules (e.g., valid signatures, no double-spending). Once a node accepts the block, it adds it to its own copy of the blockchain.

However, a single confirmation is considered preliminary. For high-value transactions, the community waits for additional confirmations. Each subsequent block mined on top of the one containing your transaction adds another confirmation. This chaining of blocks makes altering a past transaction exponentially difficult, as it would require redoing the proof-of-work for that block and all subsequent blocks—a near-impossible feat against the collective hashing power of the honest network.

Typically, exchanges and services consider a transaction settled after 6 confirmations, which takes about one hour on average. This multi-confirmation model provides a robust probabilistic guarantee that the transaction is permanently recorded. The decentralized consensus achieved through this mining process means no single entity, like a bank or government, controls or can reverse the settlement.

The miner who successfully mined the block is rewarded with newly minted bitcoins (the block subsidy) and all the transaction fees from the transactions included in that block. This incentive mechanism is what drives the entire security model, compelling miners to contribute honest computational power to the network.

In conclusion, Bitcoin mining settles transactions through a decentralized consensus mechanism powered by proof-of-work. Settlement is not an instant, single event but a process that gains finality through subsequent confirmations, embedded in an immutable chain of blocks. This elegant system ensures that once settled, Bitcoin transactions are secure, permanent, and free from centralized control.