Commoninfo:mining

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Mining

Mining — the activity of creating new blocks on the blockchain. For the creation of the next structural unit (block of blockchain), remuneration is usually provided in the form of new (issued) cryptocurrency units and/or commission fees.

Usually, the term "mining" is applied to the blockchain of bitcoin and other cryptocurrencies, the extraction of which is reduced to a series of calculations with a search of parameters to find the hash. These calculations are performed by machines (Asics, video cards, mining farms).

Different cryptocurrencies use different calculation models, but they are always long enough in time to find an acceptable option and fast enough to verify the solution found (see PoW). Such calculations are used by cryptocurrency algorithms to provide protection against repeated spending of the same units, and the reward encourages people to spend their computing power and maintain the operation of networks.

Mining is not the only technology for creating new blocks and ensuring emissions. The alternative is forging (minting). Usually, only one technology is used but some cryptocurrencies use combinations of them.

Forging

Forging is an alternative method of mining cryptocurrency, carried out without the need for computational processes. Stake is what determines who among the participants would get the reward for block opening. Stake is the participant's share in the total number of coins mined.

How forging works

Forging is not mining in its essence: this is an investment that is carried out directly in cryptocurrency. It can be said that forger buys part of the shares (cryptomonet network) from the blockchain itself. Forgers have to master as many coins as possible to increase the share and, accordingly, profitability — while they are not required to provide computing power.

The receipt of new coins occurs due to the retention of previously mined or purchased coins on your account. The creator of the new block is selected by the system automatically based on the steak indicator, that is, the number of cryptocurrency units available on the electronic wallet.