What is Mining?
Mining refers to the computational process that involves solving complex mathematical puzzles to verify and add new blocks to a cryptocurrency’s blockchain. In Bitcoin and other proof-of-work cryptocurrencies, miners use specialized hardware to compete for the chance to validate transactions and secure the network.
Miners are rewarded with newly minted coins and transaction fees for their work, which incentivizes them to maintain the network’s integrity. The process requires significant computing power and energy, and as more miners join the network, the difficulty of mining increases.
In the cryptocurrency ecosystem, mining serves two essential purposes: ensuring the security and decentralization of the network and controlling the issuance of new coins. For example, Bitcoin has a capped supply of 21 million coins, and mining controls the rate at which new coins are introduced, slowing down as more are mined.
Mining also plays a crucial role in preventing fraud, such as double-spending, where someone attempts to use the same cryptocurrency twice. Through the decentralized verification of transactions, miners contribute to maintaining the trust and security of the entire cryptocurrency network.
