One-sentence definition: Mining is using a specialized machine to find a required hash.
Why it matters:
Mining is one of the ways new coins enter the circulation. Mining makes it almost impossible to create fake transactions because then the person who would want to fake a transaction would need to outperform all of the miners all over the world. Note that mining involves ongoing electricity costs and financial risks, and profitability varies based on hardware efficiency, electricity rates, and network difficulty.
Example:
Ethereum switched from mining to staking in 2026 which is a way to putt your crypto to work on a blockchain network, so now new ETH enters circulation through validators who lock up coins rather than miners who solved puzzles.
Links (internal):
- Basics post: What is a hash and why does it matter?
- Related glossary term: Solo Mining