Minting in crypto: how it works and why it is needed

Minting is simply the creation of new crypto coins. It sounds simple, but there is serious mechanics behind it.

The main idea: if in the traditional financial system the central bank prints money, then in crypto this process is decentralized. There is no single authority — instead, the network itself generates new coins through special consensus mechanisms.

Two methods: PoW and PoS

Proof of Work (PoW) — this is what is used by Bitcoin. Miners take powerful computers and solve complex mathematical problems. The first to solve it receives a reward in the form of new coins. This requires huge computational power and, to be honest, a lot of electricity.

Proof of Stake (PoS) — a more modern and “greener” approach. Here, supercomputers are not needed. Instead, participants simply “stake” their coins (by locking them in a wallet), and the network selects them for transaction validation. The more coins you stake — the higher the chance of receiving a reward.

Why this is important

Minting provides:

• Liquidity — new coins come into circulation
• Network Security — participants are motivated to verify transactions correctly
• Deficit — most cryptocurrencies have a limited supply (unlike traditional money, which can be printed endlessly)

Pros and Cons of PoS

✅ Pros:

• Low energy consumption ( is more than 1000 times less than PoW)
• More accessible for ordinary people ( no powerful hardware needed )

⚠️ Disadvantages:

• The risk of centralization (the rich get even more)
• Potential vulnerability to attacks from large holders

Essence

Minting is the heart of the crypto ecosystem. Without it, the network cannot function, and coins lose value. The choice between PoW and PoS depends on the project's priorities: maximum security (PoW) or energy efficiency (PoS).