What is cryptocurrency mining & how does it work?

Mining is the process by which new cryptocurrency tokens or coins are generated. It bears little resemblance to the work done by those who physically mine for precious metals like gold. However, the comparison does hold; digital currency miners use computers to solve cryptographic problems and receive a reward in the form of cryptocurrency.

What is mining and how does it work?

The mining process entails solving incredibly complex computational math problems that are too difficult to be solved by hand. Instead, they require powerful computers. As a reward for their work, miners will often receive cryptocurrency in exchange for mining. Does this sound confusing?

What is bitcoin mining and how does it work?

Mining and Bitcoin Circulation In addition to lining the pockets of miners and supporting the Bitcoin ecosystem, mining serves another vital purpose: It is the only way to release new cryptocurrency into circulation. In other words, miners are basically "minting" currency.

Can you make a few hundred dollars a month mining cryptocurrency?

However, making a few hundred dollars per month mining cryptocurrency is possible. Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs.