The term minting refers to a process in which tokens are generated. The term is often used in connection with cryptos and NFTs.
This is minting
Minting is an essential part of cryptocurrencies. It is a method of creating new tokens for a blockchain network. This process is used to increase the circulating supply and is often done by validator nodes. Cryptocurrencies created through minting often have no upper limit and rely on the constant growth of the project’s economic system.
- There are two types of minting: proof of work and proof of stake. The main difference between these two types lies in the process. However, both types result in new coins being created. Proof of Work requires mining, which uses powerful processors to solve mathematical problems. The so-called miners receive a portion of the coins created for providing the computing power to solve the cryptographic equations.
- Blockchain: This is a directory of information blocks. These information blocks contain transactions. These blocks build on each other and are stored via a network. This requires a release protocol. This is used for the decentralised switching of data between the network participants.
- Proof of Work: This is how the consensus mechanism of the blockchain is described. The blockchain protocol relies on an effective approach of decentralised exchange. If there are any changes in the blockchain, they are confirmed by a consensus mechanism. This enables the system to work independently as well as reliably. The best-known Proof of Work Coins include Bitcoin, Dogecoin as well as Litecoin.
- Proof of Stake: Proof of Stake requires users who want to validate transactions against cryptocurrency to wager a large amount. This amount is called a stake. The more coins wagered by a person, the higher the probability of being selected.