Cryptocurrencies, such as Bitcoin (BTC) and Ethereum 1.0 (ETH), use a consensus process called Proof of Work. The network solves so-called “problems” using enormous computing power. So it's about validating transactions between two people. A transaction is, for example, a payment in cryptocurrency or the conclusion of a smart contract. It must always be ensured that the corresponding digital coins are available for payment and have not already been issued elsewhere, or that the content of the smart contract is correct and has not been changed and that it belongs to person X.
Validation is held by solving a mathematical puzzle. Solving these puzzles requires a lot of computing power, which repeatedly leads to discussions about sustainability. The task of solving the puzzles is taken on by so-called "miners", who are located worldwide. They compete with each other to be the first to solve a cryptographic puzzle. The winner gets the right to add the latest "block" with verified transactions to the blockchain and is rewarded with the respective blockchain's cryptocurrency.
Is it worth mining yourself?
Working as a single miner is economically unattractive these days. The market is dominated by large mining companies and the rewards for Bitcoin (BTC), for example, continue to fall due to so-called halvings.
