Here’s how it works:
Verification of Transactions: When people send cryptocurrency to each other, these transactions need to be confirmed. Miners collect and validate these transactions into groups called "blocks."
Solving Complex Puzzles: To add a block to the blockchain, miners must solve a cryptographic puzzle, which requires significant computational power. This process is called "Proof of Work" (PoW).
Reward: The first miner to solve the puzzle gets to add the block to the blockchain and is rewarded with new cryptocurrency (this reward decreases over time, like Bitcoin’s halving).
Maintaining Security: Mining ensures the integrity of the blockchain by making it very difficult and resource-intensive for anyone to alter past transactions.
Mining requires specialized hardware, consumes a lot of electricity, and is highly competitive due to the large number of miners worldwide.
