Glossary

Mining

Plain-language definition Crypto glossary

Key takeaways

Mining is the process of using computational work to validate transactions and add new blocks to a proof-of-work blockchain, with miners rewarded in newly issued coins and transaction fees.
Miners assemble pending transactions into a candidate block and repeatedly hash it searching for a result that meets the network's difficulty target, which requires large amounts of computing power and electricity.
Mining secures a proof-of-work network and distributes new supply without a central issuer, though its energy use is the main point of debate.

Definition

Mining is the process by which new transactions are verified and added to a proof-of-work blockchain, and new coins are issued as a reward. Miners compete using specialized hardware to solve a computationally difficult puzzle; the first to solve it gets to add the next block and collect the block reward and transaction fees.

Why it matters

Mining is what secures a proof-of-work network: rewriting the blockchain’s history would require redoing that computational work faster than the rest of the network combined, which becomes impractically expensive as more miners participate. It also controls how new coins enter circulation, on a schedule set by the protocol rather than a central issuer.

Example

Bitcoin is the best-known proof-of-work, mined cryptocurrency. See our entry on proof-of-work for how the underlying consensus mechanism works, and our entry on halving for how Bitcoin’s mining reward decreases over time.

This is educational information, not financial advice. Coingsty does not recommend buying or selling any asset.

FAQ

Frequently asked questions

How does mining secure a blockchain?

Miners spend real computing power and electricity to find a valid block that meets the difficulty target, and the network verifies each block before accepting it. This costly work is what makes a proof-of-work network secure and distributes new supply without a central issuer.

Why does mining use so much energy?

Each hashing attempt is essentially a guess, so finding a valid block requires enormous numbers of attempts and therefore large amounts of computing power and electricity. This energy use is the main point of debate around proof-of-work mining.

Why has mining moved toward specialized hardware and pools?

On the largest networks, the cost and competition of mining have pushed it toward specialized ASIC hardware that hashes far more efficiently than general computers. Miners also join large pools to combine resources and earn steadier rewards.