What is Mining? – simply explained

What is mining? - Simply explained

In order to understand the broad concept of mining the analogy of gold is for instance the best way to explain its logic. There was a time when every US dollar was backed by the equivalent value in the form of Gold. We used to call this the Gold Standard. But the Gold Standard does not refer to a time where everyone was digging into the earth to get his own pieces of Gold in order to back up his funds in fiat currencies right? Accordingly, it were rather a few people, the miners, fully responsible to meet the high demand of the monetary system.

This analogy is a great fit as the concept of mining in crypto-related topics refers to the same principle. A few people, the miners, are sharing their computing power with the Blockchain and validate transactions by solving complex mathematical problems and keep the Blockchain safe. In exchange they get rewards in form of the respective cryptocurrency to cover their costs and expenses.

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