Mining
Last reviewed: December 18, 2025
Mining is the computational process of validating cryptocurrency transactions and securing blockchain networks by solving complex mathematical puzzles in exchange for newly created cryptocurrency rewards.
Detailed Explanation
Common Questions
Mining major cryptocurrencies like Bitcoin with home computers is no longer profitable due to specialized ASIC hardware dominance and high electricity costs. However, some alternative cryptocurrencies can still be mined with gaming GPUs, though profitability depends on electricity costs, hardware efficiency, and cryptocurrency prices.
Mining profitability varies greatly based on electricity costs, hardware efficiency, cryptocurrency prices, and network difficulty. Professional operations with cheap electricity and efficient hardware may earn steady profits, while home miners often struggle to cover electricity costs. Most retail miners are not profitable with current difficulty levels.
Mining secures blockchain networks by making attacks expensive and validates transactions without central authorities. Miners compete to process transactions honestly because cheating would cost more than honest participation. This creates a decentralized system where network security scales with economic value, maintaining trust without requiring intermediaries.
Common Misconceptions
Mining requires significant upfront hardware investment, ongoing electricity costs, and technical knowledge. Most home miners lose money due to hardware costs, electricity expenses, and increasing network difficulty. Professional mining operations with industrial-scale efficiency and cheap electricity dominate profitability.
Mining serves essential functions including processing transactions, securing networks against attacks, and distributing new cryptocurrency fairly based on computational contribution. The electricity usage secures billions of dollars in value and enables trustless peer-to-peer transactions without central authorities.
Only Proof-of-Work cryptocurrencies use mining. Many modern blockchains use Proof-of-Stake or other consensus mechanisms that don't require energy-intensive mining. Ethereum transitioned from mining to staking in 2022, and many new projects choose more energy-efficient alternatives from launch.