Mining

Mining is the process by which new transactions are verified and added to a Proof of Work blockchain. Miners use computing hardware to repeatedly perform cryptographic hash operations, competing to find a valid block and earn the block reward.

How mining works

1. Miners collect pending transactions from the network's mempool
2. They assemble these into a candidate block and begin hashing it with a varying nonce
3. The goal is to find a hash below the current difficulty target — a threshold set by the network
4. Because hashing is effectively random, miners must try billions of combinations per second
5. The first miner to find a valid hash broadcasts the block to the network
6. Other nodes verify the block and add it to the chain
7. The winning miner receives the block reward (newly minted coins) plus all transaction fees included in the block

Why mining is important

Mining serves two critical functions:

• Transaction validation — miners confirm that transactions are legitimate and prevent double-spending
• Network security — attacking a PoW network requires controlling the majority of its total hashrate, making large networks extremely expensive to attack

Mining hardware

Different coins use different algorithms, which determines the most efficient hardware:

• ASIC — purpose-built chips for specific algorithms (e.g., SHA-256 for Bitcoin, kHeavyHash for Kaspa)
• GPU — graphics cards suitable for GPU-friendly algorithms (Blake3, Ethash-family, RandomX)
• CPU — for CPU-optimized algorithms like RandomX (Monero)

See also

• Proof of Work
• Hashrate
• Block reward
• Mining pool
• Mining hardware