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.
