The process of creating new Bitcoin or other cryptos and validating new transactions is known as mining.
Mining involves using specialized computing resources to add blocks to a Proof-of-Work (PoW) blockchain. Adding a new block validates and records the latest batch of transactions while simultaneously minting new digital tokens.
Crypto miners utilize vast amounts of computing power as they compete to solve a complex mathematical puzzle. The fastest miner to solve the puzzle earns the privilege of adding the latest block to the blockchain. They also collect transaction fees and the newly minted crypto associated with that block.
The crypto mining process begins with hardware selection, requiring specialized mining rigs or ASICs designed for efficient calculations. Miners then install software to connect to the blockchain network and monitor operations. Due to the mining’s competitive nature, many miners join pools to combine computational power and improve their chances of mining a block, sharing rewards based on contributions. Once set up, miners solve cryptographic puzzles, adding new transaction blocks to the blockchain and earning crypto rewards.
