What Is Mining?
Also known as: Cryptocurrency Mining, Crypto Mining, Bitcoin Mining
In short
Mining is the process in Proof of Work blockchains of expending computing power to validate transactions and create new blocks, earning newly minted coins and transaction fees as a reward for this work.
Miners collect pending transactions into a candidate block and try to find a hash below the target set by the network by changing the nonce value in the block header. This is a puzzle that can only be solved by trial and error. The first miner to find the correct value broadcasts the block to the network, other nodes easily verify the block's validity, and the miner receives the block reward. On Bitcoin, the difficulty is readjusted every 2016 blocks, or roughly every two weeks, so that blocks are produced on average every 10 minutes.
Mining forms the foundation of network security: an attacker who wants to alter past transactions would need to take control of a majority of the network's total computing power. Bitcoin mining today is carried out mainly with specialized hardware called ASICs and through mining pools.
Mining profitability depends on the coin price, electricity cost, hardware efficiency and network difficulty. High energy consumption has led to environmental debates. Ethereum moved to Proof of Stake in 2022 and stopped mining; mining continues on networks such as Litecoin and Dogecoin.
Last updated: · This content is for information purposes only and is not investment advice.