Minting

Minting is the creation of new tokens or NFTs on a blockchain. It’s similar to minting new coins, but it happens digitally.

What is minting?

A blockchain is a shared digital ledger where data is stored permanently. Minting adds new tokens to it.

On many Proof of Stake networks, participants first lock up tokens. This is called staking. The network then chooses a validator: a participant who checks transactions and can add a new block. The validator may receive new tokens and transaction fees in return.

Minting usually uses less energy than mining. It doesn’t require expensive computers to solve complex mathematical puzzles.

An example of minting

Imagine a validator has locked up tokens on a Proof of Stake network. The network selects this validator to check new transactions.

The validator approves the transactions and groups them into a new block on the blockchain. The validator may receive new tokens as a reward. This process is called minting.

Why is minting important in crypto?

For some crypto projects, minting determines how new tokens enter circulation. It also helps the network check and record transactions.

You may also come across minting with NFTs. In that case, a digital file, such as an image or video, is linked to a unique token on the blockchain. This records ownership information.

News about minting may cover new tokens, NFTs, or changes to a Proof of Stake network. Minting doesn’t automatically mean participation is risk-free: large token holders may have more influence, and the value of rewards can fluctuate significantly.