Mining is the function of extracting something out from ores. Ores are naturally occurring solid matter used to extract some kind of metals or metalloids. Here, the word mining is used with Ethereum. Therefore, here we are extracting the rewards by mining through Ethereum blocks.
Mining means we are creating a block of transaction, which is created by the validators so that the transaction can be added to the blockchain of Ethereum. Like protein is the power-house of a cell,so is Mining – the power-house of the Ethereum blockchain.
In decentralized Ethereum, we need to ensure that everyone agrees on the order of transaction, to solve this problem and securing network miners/ mining is needed. Protecting the Ethereum network is done by Mining.
Now talking about Proof-of- work and Proof-of-Stake, Ethereum is now deprecating PoW and using PoS instead.Talking about trust and verification, it is suggested to Verify rather than Trusting it.
Why is mining needed?
PoW – Proof of work , it tells the probability of a block to compute size of work.But in this hackers will need only 51% of the computation power to add a malicious block in it.in this the reward is first given to the first miner to solve the difficulty.
PoS – Proof-to-Stake, it tells the probability of validating the stake of the miner. It
depends on the number of the Stakes that a validator holds.Hacker would need 51% of the computation power of all the crypto-currency to make a malicious block in it.
For crypto mining?A customized personal computer is used for mining which is termed as RIG , mining rig. The essential components of mining are- Miner, Hardware and electricity requirement – also these components adds cost to the venture and thus it increases the cost of work.
Is ‘minting and mining’ the same?
Crypto-mining uses PoW blockchain, whereas Crypto-minting uses PoS Blockchain.in crypto-mining, New tokens are generated and it also facilitates transaction fees. But in Crypto-Minting the reward for validators comes from transaction fees.
Talking about the amount of energy it requires, the amount of energy required by crypto-mining is more and the consumption is also very high. Whereas the consumption needed for Crypto-minting is very less and guarantees energy efficiency.
In crypto mining, miners or validators use mathematical puzzles to check for verification, whereas in Crypto-Minting, Validators use rewards of transaction fees to become successful validators.
So Minting is different from Mining. Minting increases the number of blocks or tokens.Mining is more energy efficient. Talking about the type of blockchain used – minting is using PoW and mining is using PoS.
Validators are known to mint new tokens rather than mining out or unearthing the existing cryptocurrencies.
Mining is a difficult and troublesome process and it also needs more resources.in minting validators creates new tokens and earns rewards.
In this article you will get to know- what is Mining? What is the difference between Mining and Minting? For crypto mining, what is needed? Difference in Energy efficiency?