Definition
Mining is a block-production process used by proof-of-work networks such as Bitcoin. Miners assemble candidate blocks and repeatedly hash block-header variants until a result meets the required target. This differs from proof-of-stake validation and should not be used as a general term for every blockchain’s consensus process.
How It Works
A miner selects transactions, constructs a candidate block and searches for valid proof of work. When it finds one, it broadcasts the block. Other nodes independently check the transactions, reward amount and proof against their rules; miners cannot make invalid transactions acceptable simply by spending computational power. The accepted chain is selected according to the protocol’s cumulative-work rules.
Key Considerations
Mining helps order transactions and makes rewriting accepted history costly. Compensation may include a subsidy and fees, but revenue is uncertain and must be compared with equipment, energy and operating costs. Pools can smooth participants’ payouts while introducing pool-specific terms and dependencies. Mining more quickly does not allow arbitrary coin creation, and stronger hardware does not remove competition or the possibility that a block is not retained.