Mining
In short: Mining is the process of validating transactions and creating new blocks on a proof-of-work blockchain such as Bitcoin.
Mining is the process of validating transactions and creating new blocks on a proof-of-work blockchain such as Bitcoin. Miners run specialized computers that compete to solve a cryptographic puzzle, and the winner adds the next block to the chain and collects a reward.
Why it matters
Mining is what secures proof-of-work networks: producing a block costs real computing power and electricity, so rewriting past transactions would require an attacker to outspend the rest of the network. The block reward, made up of newly created coins plus transaction fees, is also how new coins enter circulation. On Bitcoin, the new-coin part of that reward is cut in half at regular intervals in an event called the halving. Mining today is highly specialized, with most Bitcoin mining done on ASIC machines and many miners joining pools for steadier payouts.
Example
A miner gathers pending transactions into a candidate block. Its machines then hash the block header again and again, changing a small number called a nonce each time, until a result falls below the network’s difficulty target. The miner broadcasts the block, other nodes check that it is valid, and the miner receives the block reward.