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What is mining?
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Written by Primex Finance
Updated over a week ago

Mining in the context of digital assets refers to the process of validating and verifying transactions on a blockchain network, such as Bitcoin. Miners operate powerful computers to solve intricate mathematical puzzles and add new blocks of transactions to the blockchain.

Mining involves competition among miners to find a solution to a mathematical problem, which requires significant computational power and energy consumption. The miner who successfully solves the puzzle and verifies the transactions in a block is rewarded with a newly generated digital asset, along with any transaction fees linked to the transactions in that block.

The process of mining serves multiple purposes. It secures the blockchain network by ensuring the integrity and immutability of transactions. It also helps in the creation and distribution of new coins or tokens, as well as the verification of the overall network's consensus.

Mining is most commonly observed in blockchain networks that employ a Proof-of-Work (PoW) consensus algorithm, which involves miners engaging in a competition to solve complex mathematical puzzles. However, different digital assets may employ different consensus mechanisms, such as Proof-of-Stake (PoS), which do not involve traditional mining but instead rely on validators who hold and stake their coins to secure the network.

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