b.If you are indulged in cryptocurrency trading, you must have heard about the two terms that are “crypto mining” and “crypto minting”. Many individuals are not having clarity about these terms and due to this, they use these terms interchangeably. However, there lies a difference between these terms.
Here in this blog, we will understand both these terms and learn about the difference between crypto minting and crypto mining.
What is Crypto Minting?
Crypto Minting refers to creating a new cryptocurrency as a reward for the validators when they authenticate data. Confirm blocks of transaction and record these on a blockchain network. Crypto minting is done using following the Proof-of-Stake (PoS) blockchain protocol.
To become a user as a validator, the user must stake the blockchain’s native coin to become eligible for becoming a validator. The PoS consensus would be choosing the validators at random by using an automated process. Here the interesting thing is that there would be more chances for those users to become validators to verify transactions on the blockchain who have staked more coins. The major responsibility of the validator would be recording and confirming every transaction done on the blockchain network.
Any validator who does not follow the procedure for validating blocks of transactions in cryptocurrency minting forfeits the staked coin. Transaction fees that users pay when they conduct transactions on the blockchain are used to fund validator awards in the minting process.
What is Crypto Mining?
Crypto Mining is the process through which the user will be using the blockchain network that is known as miners. They verify the blocks of transactions for upholding the security of the network and receiving rewards in the form of crypto for their work. The process of mining will lead to the generation of cryptocurrency and the miners will be rewarded for maintaining the blockchain network.
In simpler words, crypto mining can be referred to as the process of validation of transactions on a blockchain network ledger by using a combination of hardware & software to resolve a complex algorithm and earning cryptocurrency as a reward to validate the transaction blocks.
To confirm and record each new transaction, protect the security of the blockchain. And perform complicated computations, cryptocurrency mining requires the employment of high-performance specialised hardware devices. A network node is any hardware or software component that is used in the process.
The enormous amount of processing power required for mining is voluntarily provided by cryptocurrency miners. Mining requires a large amount of data and is not financially viable for individual miners. Because the miner’s computer locally saves thousands of transaction ledgers. Nowadays, mining farms invest in pricey, incredibly efficient mining machinery and pay for the electricity needed to keep it running.
Difference Between Crypto Minting and Crypto Mining
Minting and mining differ in their fundamental consensus and the method for producing new coins as incentives. While proof-of-work consensus is required for mining cryptocurrency, the proof-of-stake consensus is required for cryptocurrency minting.
Both operations result in the creation of cryptocurrency coins, however, PoW mining and PoS minting have different methods for accomplishing the same task. Let us understand the major differences between these terms through the table below.
Crypto Mining |
Crypto Minting |
Here a miner would be earning a reward in the form of crypto for solving complex mathematical problems and protecting the network. |
Here the rewards would be offered to validators for validating the transactions on a blockchain network and adding new blocks. |
Crypto mining requires hardware processing power and software to solve complex mathematical computations. |
Crypto minting would be requiring the users who will stake the native crypto coins and validate the transactions. |
PoW (Proof-of-Work Consensus) |
PoS (Proof-of-Stake Consensus) |
Along with the transaction fee, the blockchain network will be rewarded by generating new tokens for miners. |
The validators would be rewarded through the transaction fees charged on a blockchain network. |
Here high energy will be required to solve the complex computations. |
It is one of the energy-efficient methods as it does not require more energy. |
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Final Words
By concluding our discussion, we can say that crypto mining and crypto minting. Both are inter-connected and somewhat similar to each other. However, both these processes use different consensus.
If you are looking for a crypto minting platform, we recommend you to go for eBitMint which offers an online platform for various things such as crypto minting, cloud mining etc. The digital platform developed by them will be equipped with highly advanced features. The eBitMint utility platforms will surely help you in the growth and development of your business.