⛏️Mining Background

Central to the functioning of some cryptocurrencies is the process of mining. Unlike traditional fiat currencies, which are issued and regulated by central authorities, cryptocurrencies rely on a decentralised and trustless system. Mining is the mechanism through which new cryptocurrency units are created and transactions are confirmed on the blockchain. This process demands computational power ensuring the security and integrity of digital currencies.

Mining involves competing with other miners to validate and record transactions. Miners, who commit their computational resources to this task, are rewarded with newly created cryptocurrency tokens and transaction fees. The mining process not only issues new tokens but also maintains the decentralised ledger, preventing double-spending and fraud.

As the crypto ecosystem has grown, the mining landscape has diversified, with a multitude of cryptocurrencies adopting different consensus algorithms. Bitcoin, for instance, employs the Proof of Work (PoW) algorithm, while Ethereum has transitioned to a Proof of Stake (PoS) mechanism. These adaptations reflect the industry's commitment to sustainability and innovation.