What is cryptocurrency mining?

Cryptocurrency mining is the process of validating transactions and adding them to a blockchain ledger. It involves solving complex mathematical problems that verify and secure transactions on a blockchain network. Miners use powerful computers and specialized hardware to compete in solving these cryptographic puzzles.

When a miner successfully solves a problem, they create a new block of transactions and add it to the blockchain. In return for their computational efforts, miners are rewarded with newly created coins or transaction fees, depending on the specific cryptocurrency protocol.

The process is resource-intensive and requires significant computing power, electricity, and often specialized equipment. Popular cryptocurrencies like Bitcoin and Ethereum rely on mining to secure their networks and process transactions. However, some cryptocurrencies, like Ethereum, are transitioning to different consensus mechanisms, like Ethereum's move from proof-of-work (mining) to proof-of-stake (staking), to address concerns about energy consumption and scalability.