For me, I’m yet to understand what the word “mining” is used for cryptocurrencies.

Although it sounds good and classic. I’ll explain mining to you with a good illustration.

We’re use to transferring money from one bank app to another. Let’s imagine you want to transfer $400 from your PayPal account to a Barclays bank account.

You get your phone. Login. Type the figure and then send. Immediately you send, a signal is sent to the institution, PayPal via the network to initiate a transfer of fund from your PayPal account to a Barclays account.

Within seconds or maybe minutes, the transaction will be completed.

Now, in the mirror of Cryptocurrency and Bitcoin in particular, once that transaction is initiated, the institution in this case is not a bank but a group of miners who are making sure that your transaction pulls through.

How do they do it?

They use powerful computers to solve the mathematical problems that your transaction generates.

As they solve these problems, your transaction is going through until the process is finished. Once finished, a block is formed and added to the series of blocks already created.

That’s where the Chain in Blockchain is coming from.

So, mining is that process where by these persons with powerful computer machines make sure your transaction pulls through.

These miners, as they are called, are rewarded as they help every transaction to pull through. That’s why you have transaction fee. Peer of it goes to them.

Also, it’s good to mention that these miners can mine as individuals (Solo Mining) or as a group (Pool Mining).

I believe it’s so clear.

Thanks to Binance Academy that says this about mining:

Since mining involves multiple attempts of finding a solution for a sort of mathematical problem, the job of an ASIC is to perform as many attempts as possible (i.e., as many hashing functions per second as possible).

Binance Academy


And you can also see a short video on it here:

Another definition here too:

Mining” is the process by which nodes in the blockchain’s network validate and confirm transactions, with miners earning newly minted tokens in return for their computational effort.

Investopedia

Hope you enjoyed this. Check out other simpler posts for the easiest Blockchain explanations.