Mining is how proof-of-work blockchains like Bitcoin add new transactions and create new coins. Miners run specialised computers that race to solve a hard cryptographic puzzle; the winner adds the next block and is rewarded with newly issued coins plus transaction fees.
The puzzle has no shortcut — it takes raw, repeated computation — and that expended effort is precisely what secures the network. Rewriting history would mean redoing all that work faster than everyone else combined, which is prohibitively expensive on a large chain.
The downside is energy use. Because security comes from real-world electricity and hardware, large proof-of-work networks consume substantial power, which is the main criticism levelled at them and a key reason some networks use proof of stake instead.
Worked example
Bitcoin miners collectively perform trillions of calculations per second, and the reward paid to them halves roughly every four years.
This definition is general education, not investment advice. Markets — especially crypto — are volatile and you can lose money. Please read our disclaimer and see our methodology.