Mining & Staking

What Is Crypto Mining?

Mining is the process by which new transactions are verified and added to a Proof of Work blockchain like Bitcoin. Miners use powerful computers (often specialized hardware called ASICs) to race to solve a mathematical puzzle. The first miner to solve it gets to add the next block of transactions and is rewarded with newly created Bitcoin (currently 3.125 BTC per block after the April 2024 halving) plus transaction fees from the block's transactions.

Mining serves two purposes: it secures the network (because attacking it would require more computing power than all honest miners combined) and it distributes new coins into circulation in a predictable, fair way. The difficulty of the puzzle adjusts automatically to maintain a consistent block time (~10 minutes for Bitcoin) regardless of how many miners join or leave.

What Is Staking?

Staking is the Proof of Stake equivalent of mining. Instead of using computing power, you lock up ("stake") your cryptocurrency to help validate transactions. In return, you earn rewards — similar to earning interest. On Ethereum, staking yields around 3-4% annually. You can stake directly by running a validator node (requires 32 ETH) or use liquid staking services like Lido (no minimum), which stake on your behalf and give you a token (stETH) representing your staked position.