â Cryptocurrency Mining
đŽBefore transactions are stored on the blockchain, they need to be verified. The blockchain network also has to be maintained. And more importantly, new cryptocurrencies are to be created from time to time. These tasks are carried out by a group of people called âminers.â
đŽCryptocurrency mining is the process of validating crypto transactions and then adding them to the network in exchange for crypto rewards. To validate Bitcoin transactions, for instance, miners have to solve complex mathematical questions using powerful computers. This is called the Proof-of-Work (PoW) consensus. Solving these equations involves powerful computers and energy, making the PoW an expensive endeavor.
Bitcoin miners who successfully solve the problems are allowed to add blocks of verified transactions into the blockchain. These miners are paid a reward of 6.25 Bitcoins (about $262K) for their trouble.
đŽOther cryptocurrencies, like Solana and Cardano, use a Proof-of-Stake (PoS) consensus, where miners secure and maintain the network by âstakingâ their coins. PoS consensus attributes mining power based on the proportion of coins staked or held by the miner.
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