Cryptocurrencies are ‘mined’. To have better concept of how cryptocurrencies are made, we can refer to Bitcoin, which is created by the ‘mining’ process The ‘Mining’ process focuses on massive amounts of powerful computer hardware and resilient software. Mining is the process by which cryptocurrency transactions are verified and new units of cryptocurrency are created.Each time a cryptocurrency transaction occurs , a cryptocurrency miner, who also serves as a node on the blockchain on which these transactions are taking place, tries to decrypt the block containing the transaction information. For example, if Person A wants to send 0.1 Bitcoins to Person B, then miners on the Bitcoin blockchain compete to be the first to decrypt the block that contains the transaction information.Decrypting the block not only authenticates the transaction, but also provides the information about who sent how many Bitcoins to whom and at what time and date. Once the block has been decrypted and has been accepted by most of the nodes on the blockchain as being authentic, the block is added to the blockchain.Now, the verification process is pretty resource intensive in terms of the computational power required. As such, individual miners often find the process too expensive and so they join pools to collectively use computing power.
