How Does Ethereum Mining Work?
Ethereum mining is the process through which new Ether (ETH) coins are generated and transactions are verified on the Ethereum blockchain. It involves solving complex mathematical puzzles using computational power, which is known as a Proof-of-Work (PoW) consensus mechanism. Miners compete to solve these puzzles, and the first one to find the correct solution gets to add a new block to the blockchain.
When a miner successfully mines a block, they not only receive a reward in the form of newly minted Ether but also collect transaction fees from the transactions included in that block. The difficulty of the puzzles adjusts automatically based on the network's total hashing power, ensuring that blocks are mined at a relatively constant rate, approximately every 13-15 seconds.
The Ethereum network is undergoing a significant transition from Proof-of-Work to Proof-of-Stake (PoS) with the Ethereum 2.0 upgrade, which alters the mining system. Under PoS, validators will replace miners to confirm transactions and create new blocks, marking a shift towards a more energy-efficient and scalable blockchain.
While traditional PoW mining requires substantial computational resources and energy, the planned PoS system aims to enhance network security and reduce environmental impact, making Ethereum more sustainable in the long run.