# Mining

> Cryptocurrency mining is validating and recording transactions on a blockchain network while creating new units of a specific cryptocurrency

- Canonical URL: https://iq.wiki/wiki/mining
- Categories: Glossary
- Created: 2023-06-18T14:45:36.131Z
- Last updated: 2026-06-02T03:04:33.670Z
- Source: IQ.wiki — the world's largest blockchain and crypto encyclopedia (https://iq.wiki)

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**Cryptocurrency mining** is validating and recording transactions on a [blockchain](https://iq.wiki/wiki/blockchain) network while creating new units of a specific [cryptocurrency](https://iq.wiki/wiki/cryptocurrency). [\[1\]](#cite-id-u6gv1dr9jf7)​

[YOUTUBE@VID](8dAWgnmgcso)

## Overview

Crypto mining involves using specialized computer hardware to solve complex mathematical puzzles or algorithms. Miners compete against each other to find the solution and validate a block of transactions. Once a miner successfully solves the puzzle, they add the block to the [blockchain](https://iq.wiki/wiki/blockchain) and are rewarded with a certain amount of crypto as an incentive. [\[2\]](#cite-id-hqhx6qxi8zb)​

The reward decreases transaction fees by creating a complementary incentive to contribute to the processing power of the network. Mining is measured by hash rate typically in TH/s.[\[5\]](#cite-id-1ymuunl6wm6)​

Some miners pool resources, sharing their processing power over a network to split the reward equally, according to the amount of work they contributed to the probability of finding a block. A "share" is awarded to members of the mining pool who present a valid partial [proof-of-work.](https://iq.wiki/wiki/proof-of-work-pow)​

### Mining Hardware

To participate in crypto mining, miners utilize powerful computer systems equipped with specialized mining hardware. In the early days of cryptocurrencies like [Bitcoin](https://iq.wiki/wiki/bitcoin), mining was possible using standard CPUs (central processing units) or GPUs (graphics processing units). However, as cryptocurrencies gained popularity and the mining difficulty increased, dedicated mining hardware called **ASICs** (Application-Specific Integrated Circuits) was developed. ASICs are highly efficient and designed specifically for mining cryptocurrencies like [Bitcoin](https://iq.wiki/wiki/bitcoin-btc), [Litecoin](https://iq.wiki/wiki/litecoin), etc. [\[1\]](#cite-id-u6gv1dr9jf7)​[\[3\]](#cite-id-blpr934mtho)​

#### GPU Price Increase

An increase in cryptocurrency mining increased the demand for graphics cards (GPU) in 2017. The computing power of GPUs makes them well-suited to generating hashes. [\[6\]](#cite-id-vx0cehholm)​

#### Mining Accelerator Chips

Multiple companies have developed specialized crypto-mining accelerator chips, offering higher price-performance capabilities compared to CPU or GPU mining. Intel, at one point, introduced its crypto accelerator chip, called Blockscale. [\[7\]](#cite-id-7zvge5s0yh9)​

[YOUTUBE@VID](kZXXDp0_R-w)

### Mining Pools

Mining pools allow miners to combine their computational resources in order to increase their chances of finding and mining blocks on a blockchain. When a block is successfully mined, the rewards are distributed among the participants based on their contributed computing power. [\[4\]](#cite-id-xd1vhbbl7dt)​

### Energy Consumption

Crypto mining requires substantial computational power, which translates into high energy consumption. This has led to concerns about the environmental impact of mining, particularly for cryptos like [Bitcoin](https://iq.wiki/wiki/bitcoin). The energy consumption associated with mining has prompted discussions on the development of more energy-efficient mining technologies and the use of renewable energy sources to mitigate environmental concerns. [\[4\]](#cite-id-xd1vhbbl7dt)​

### Mining Rewards

Miners are rewarded for their computational efforts in the form of newly minted cryptocurrency and transaction fees. The specific reward structure varies among different cryptocurrencies. For [Bitcoin](https://iq.wiki/wiki/bitcoin), the reward is halved approximately every four years in an event known as **"Bitcoin halving."** This mechanism is designed to control the inflation rate and ensure a limited supply of Bitcoin over time. [\[2\]](#cite-id-hqhx6qxi8zb)​