Mining

Mining is a process used by some blockchain networks to validate transactions and add them to the ledger.

It plays a role in securing certain blockchains and maintaining agreement among participants.

Why mining exists

In decentralized networks, there is no central authority to verify transactions.

Mining provides a way for participants to collectively confirm transactions and agree on the order in which they are recorded.

How mining works

Miners use computing resources to solve cryptographic problems defined by the network’s rules.

When a miner successfully solves a problem, they propose a new block of transactions to be added to the blockchain. Other participants verify the result before it becomes part of the ledger.

Mining and network security

Mining helps secure a blockchain by making it difficult to alter past records.

Changing previously recorded data would require repeating the computational work for many blocks, which becomes increasingly impractical as the chain grows.

Mining and new coins

Some networks use mining as a way to introduce new cryptocurrency into circulation.

This process follows predefined rules and does not guarantee value or stability. Different networks use different issuance models.

Common misunderstandings

Mining is sometimes misunderstood as being required for all blockchains.

In reality, mining is associated primarily with proof of work systems. Other networks may use different methods to validate transactions without mining.

Key takeaway

Mining is one method blockchains use to validate transactions and maintain security.

Understanding mining helps explain how some decentralized networks operate without centralized control.

Next lesson

Mining is one method used by blockchain networks to secure transactions and add new records.

The next lesson looks at Bitcoin, the first cryptocurrency to use mining as part of its design, and explains how it works in practice.

Read: Bitcoin →