Minting

Minting is the process of registering new coins or digital assets on a blockchain. The term ‘minting’ originally meant ‘to stamp metal to make coins’. Unsurprisingly, this expression is also used to refer to the minting of new fiat currencies, i.e. coins approved by a government and used on a national scale. And, as per the original definition, the physical production of cash through the processing of metals.

In the context of Web3, minting means coining new tokens and creating and distributing NFTs (literal translation of ‘Non-Fungible Token’, digital works registered on blockchain). Since tokens and NFTs are not tangible assets, minting involves the creation of new blocks within a blockchain. In order to do so, it is necessary to register new information or validate transactions through a series of computational operations or Smart Contracts (software that automates processes on the blockchain).

How can minting be done? To register an NFT on the blockchain, it is possible to take advantage of the services offered by some secondary marketplaces. On OpenSea, one of the best known platforms for buying and selling NFTs and digital assets, it is possible to mint NFTs for free on the Ethereum or Polygon blockchain. The cost of minting NFTs on other blockchains or marketplaces, on the other hand, is regulated by fees set by the individual platform.

If you have the appropriate technical skills, it is also possible to mint your NFTs in an even more decentralised manner through the Smart Contracts of selected blockchains.

The process of minting should not be confused with another way of creating digital currencies on blockchain: mining. Primarily, the difference between minting and mining lies in the way tokens are registered on the blockchain.

Minting is a generic term for the creation of new tokens or coins and is often associated with the Proof-of-Stake consensus mechanism. An example of a blockchain that uses the Proof-of-Stake algorithm, and on which it is therefore possible to mint NFTs or tokens, is Ethereum.

Mining is a creation process associated with another consensus mechanism: Proof-of-Work. This algorithm not only creates new blocks, but also enables the validation of transactions made on the blockchain. Through mining, miners can obtain rewards for each verified and created block. To create new blocks, it is necessary to solve complex mathematical problems, using the computing power of one’s own computer. What is an example of a blockchain that makes use of mining? Bitcoin

Correlated words

UTXO

The Unspent Transaction Output is the amount of cryptocurrency resulting from a transaction on certain blockchains, which can be the input for future transactions.

Account Model

On the Ethereum blockchain, accounts are the foundation of the decentralised ledger and they are usually associated with a wallet address.

Royalty

Financial compensation paid to the creator of an NFT following its secondary purchase.

Multisig Wallet

A multisig wallet is a type of crypto wallet that requires two or more private keys to perform transactions.

Custodial Wallet 

A type of crypto wallet in which third parties hold the owner's private keys.

Seed phrase

Sequence of 12 or 24 words used to retrieve access to a wallet.

Non custodial wallet

A crypto wallet in which the owner retains custody of the private keys.

Fan Token

Fan Tokens are utility tokens that allow sports teams to connect with their fans.

NFT Domains

An NFT domain is a decentralised Internet domain managed by smart contracts and registered on the blockchain.

Metaverse

Digital platform in which users take part in shared experiences, immersed in an online virtual environment, sometimes based on blockchain

Delegated Proof-of-Stake

A variant of Proof-of-Stake in which the stake is transferred to delegates who act as validators. 

Pure Proof-of-Stake

It is a type of Proof-of-Stake in which validators are chosen randomly and anonymously thanks to the VRF function.

Liquid Proof-of-Stake

Proof-of-Stake variant in which tokens are not staked but liquid.

Stake

Total amount of cryptocurrency being staked

Staking Pool

The joint staking of several people's cryptocurrencies with the aim to increase the rewards

Cold Staking

Type of staking that requires the use of a cold wallet

Blockchain

A technology based on cryptography that enables decentralised and uncensored execution of any type of transaction.

Proof-of-Stake

A consensus mechanism based on putting cryptocurrencies at stake in order to contribute to the blockchain.

Genesis Block

This is the first block of a blockchain, sometimes referred to as block 0.

Block Height

The number of blocks in a blockchain starting from the genesis block.

Network

The set of interconnected computers, called nodes, on which the blockchain of a given cryptocurrency is based.

Transactions per second (TPS)

Literally 'transactions per second', it is a measure of the speed of a blockchain.

Transaction

Exchange of value, property or data between two parties.

Shard

Fragments' of blockchain operating in parallel.

Proof-of-Work

A consensus mechanism based on computational power to contribute to the blockchain.

Node

Device connected to a blockchain and participating in its network.

Off-chain

Transaction that is not performed on the blockchain.

On-chain

Any process performed on the blockchain.

Mining Pool

A company that bases its business on mining, by collecting a large number of powerful mining devices.

Mining

The process of adding new blocks to the blockchain and creating new bitcoins by miners.

Consensus Mechanism

A decentralised way to validate transactions on blockchain.

Hash

A cryptographic function that serves to identify each block of the blockchain.

Governance

In the cryptocurrency sector, it indicates the way and rules by which projects and blockchains are governed.

Fee

Commission paid for the execution of transactions.

Double Spending

The possibility for an attacker to spend the same amount twice if the payment system does not have a mechanism to prevent this.

DoS

A Denial of Service is a computer attack that aims to make a network or service inaccessible.

DLT

Distributed Ledger Technologies are technologies based on an immutable ledger of transactions, the control of which is distributed.

Decentralised

It is said of a system governed by the consensus of its participants and without a central authority or hierarchy.

Cold Wallet

Wallets that are not connected to the internet.

Bridge

In blockchain technology, it is a connection that allows interaction between different blockchains.

Financial Bubble

Increase in the value of an asset, in an excessive way, given its intrinsic value.

Blockchain Explorer

Software that allows users to view all transactions and data exchanged on a given blockchain.

Block

The set of encrypted transactions that, connected to other blocks, makes up a blockchain.

ASIC

Devices dedicated to mining certain cryptocurrencies.

Interoperability

The ability to exchange data with other platforms, including those based on different types of blockchain, as well as with the off-chain world.

51% Attack

When a node or group of nodes attempts to take control of the blockchain.

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