Minting is the process of issuing new digital assets in the crypto ecosystem. This method adds fresh coins and tokens into circulation, enabling them to be traded or used within its ecosystem. In many ways, minting is similar to mining. However, there are a few crucial differences.
Proof of Stake (PoS) systems use minting to introduce new coins into circulation. The system uses validators, or stakers, to verify transactions and introduce new blocks to the blockchain.
On the other hand, mining is rooted in the Proof of Work (PoW) mechanism. In these cases, miners utilize specialized hardware to solve intricate cryptographically-hard puzzles to create blocks.
While mining is an energy-intensive process, minting is considerably more environmentally friendly. Unlike the one-off nature of minting, mining is an ongoing activity. It persists as long as the blockchain network is active, continually validating transactions and fortifying its security.
Beyond conventional cryptocurrency units, minting is also an integral process for generating Non-Fungible Tokens (NFTs). Typically, minting an NFT involves the following steps:
- Fund their crypto wallets with the corresponding coin. For example, ETH for Ethereum-based NFTs.
- Register an account on an NFT marketplace like Binance NFT or OpenSea.
- Connect your wallet to the website.
- Upload the digital file or artwork that will be converted into an NFT.
- Mint the NFT.
