Definition
The process of using computational power to validate transactions and add new blocks to a Proof of Work blockchain. Miners are rewarded with newly created cryptocurrency and transaction fees.
Why It Matters
Mining secures Proof of Work networks and creates new cryptocurrency. Understanding mining helps explain Bitcoin's energy consumption and the economics of blockchain security.
Example
Bitcoin miners use specialized ASIC hardware to solve cryptographic puzzles. The first miner to find the solution earns the 6.25 BTC block reward.
Related Terms
Proof of Work
ASIC
Hash Rate
Node