So in the last post, we talked about how crypto is digital money — basically numbers on a screen that somehow have real-world value. And remember that moment I mentioned people mining crypto?

Yeah, that part tends to throw people off.

I’ll never forget the first time I heard it. I immediately pictured someone deep in a coal mine, swinging a pickaxe, covered in dust, maybe yelling “I struck Bitcoin!” My brain went full literal.

But nope. No caves. No shovels. No dynamite.

Turns out, when they say mining in the crypto world, they mean something completely different — and honestly, way more complicated. You're not digging up anything physical. You’re digging through code. Like, actual math problems. With computers. Lots of them.

And that’s what we’re about to dive into. What does it really mean to “mine” crypto? How does code become currency? Why are there warehouses full of computers racing to solve puzzles?

Let’s break it down, one block at a time.

Who Mines? (And Why?)

Back in the early days of Bitcoin, you could actually mine using a regular laptop. Yup — just you, your computer, and some software. People were mining Bitcoin in their dorm rooms, basements, and on lunch breaks at work. (Imagine how many millionaires forgot an old hard drive from 2011…)

But as more people started mining, the competition got stiffer. These days, mining is more like an arms race. You’ve got mining farms — massive warehouses filled wall to wall with high-powered machines called ASICs (Application-Specific Integrated Circuits). These machines don’t check email or browse TikTok. They exist for one reason: to mine crypto.

The more powerful your machine, the more puzzles you can attempt to solve per second. And since there’s usually only one winner per block (meaning one miner gets the reward), people have teamed up to form mining pools, where multiple miners combine their computing power and split the rewards.

So whether it’s a solo enthusiast or a giant facility with enough electricity to light up a city block, they’re all chasing the same goal: solve the puzzle first.

So Why Go Through All This Trouble?

Simple: money and influence.

Money – Every time a miner successfully solves a puzzle (also known as validating a block), they get rewarded in cryptocurrency. For Bitcoin, that's currently 6.25 BTC per block (as of 2024). At today's prices… yeah, it’s worth it.
Transaction fees – On top of the block reward, miners also get paid the transaction fees attached to all the individual transactions in that block. Like a bonus tip.
Power – Not the electrical kind (although they need a lot of that too). Miners are the backbone of decentralized networks. They validate transactions, keep the network secure, and make sure no one’s cheating the system. In return, they gain influence over the network — especially in proof-of-work blockchains like Bitcoin.

So in a way, crypto mining is part entrepreneurial hustle, part digital guardianship, and part high-tech treasure hunt.

The Tech Side — What Does Mining Look Like?

Alright, let’s peek behind the digital curtain. What does crypto mining actually look like?

Imagine this: rows and rows of blinking machines, wires everywhere, fans buzzing so loud you can’t hear yourself think, and glowing lights that make the whole place feel like a rave for robots.

Some mining farms literally look like the Matrix had a baby with a server warehouse. It’s wild.

Mining Rigs: Not Your Average Computer

Crypto mining isn’t something you casually do on your grandma’s old desktop. These machines are built for one purpose: raw computational power. At the heart of it are mining rigs, which are either:

GPUs (Graphics Processing Units): These were the go-to for a long time, especially for coins like Ethereum (back when it still used proof-of-work). Gamers hate miners because they made GPUs hard to find for a while.
ASICs (Application-Specific Integrated Circuits): These are the big dogs. They’re designed only to mine one specific cryptocurrency — usually Bitcoin. They don’t do email, can’t open Netflix, and definitely won’t help you with your taxes. They just crunch numbers. Fast.

Why So Much Power?

Mining is basically a giant guessing game. Miners are trying to find a very specific number (called a hash) that fits a very specific rule. To do that, their machines have to make thousands — even millions — of guesses every second.

That’s a ton of calculations. The faster your rig, the more guesses you can make — and the better your chances of winning the reward.

Now imagine hundreds of thousands of machines, all guessing 24/7, racing each other to find that one magic number.

The Energy (and Water) Elephant in the Room

Of course, with great computing power comes ridiculous energy consumption.

Crypto mining — especially Bitcoin — has taken a lot of heat (pun intended) for its environmental impact. These machines don’t just sip electricity — they chug it. That’s why many mining operations are built near cheap power sources like hydroelectric dams or natural gas plants.

And let’s talk about cooling. All that nonstop guessing generates so much heat that farms need powerful cooling systems just to keep the hardware alive. Most use giant industrial fans, but others use water-based cooling systems — and that’s where another problem crops up.

Some mining operations are located in areas already dealing with drought or limited water supply. So using tons of water to cool machines that are solving digital math puzzles for virtual money? Yeah… it doesn’t sit well with everyone.

There’s a growing push for more sustainable solutions — solar-powered farms, carbon offsets, and tech improvements — but it’s still a big, messy conversation in the crypto world.

So yeah — it’s noisy, it’s bright, it’s hot, it’s expensive, and it drinks up power and sometimes water like a thirsty robot. But for many? The payoff still makes it worth it.

How Does Mining Affect Coin Value?

Alright, so we’ve talked about what mining is — now let’s talk about what it does to the value of a coin.

One of the biggest factors behind a cryptocurrency’s worth is scarcity. You know, that classic supply and demand situation. The fewer there are of something — and the more people want it — the more valuable it becomes. Same reason limited-edition sneakers or rare Pokémon cards can go for insane prices. People love what’s hard to get.

Bitcoin’s Cap: Only 21 Million, Ever

Let’s use Bitcoin as the example here (because it’s kind of the OG of crypto). Bitcoin has a hard supply cap. That means there will never be more than 21 million Bitcoins in existence. Period. No one — not even the developers or the world’s richest Bitcoin bros — can make more.

So every time a new Bitcoin is mined, we get closer to that cap. Once all 21 million are mined, that’s it. No more new coins.

That built-in scarcity is part of what makes Bitcoin so valuable. It's digital, but still finite — like digital gold.

Mining Gets Harder Over Time

But it’s not just the total supply that matters. It’s also how easy (or hard) it is to mine.

Here’s the thing: Bitcoin’s network is designed to make mining harder as more people join the race. The more competition there is, the harder the puzzles get. This keeps coins from being mined too quickly and helps control inflation.

And every four years or so, Bitcoin goes through a process called a halving. Sounds dramatic, and it kinda is.

During a halving, the reward miners get for successfully mining a block gets cut in half. So if you were earning 6.25 BTC per block before, now you’re only getting 3.125 BTC. Same work, less reward.

It’s like the Bitcoin version of a company saying, “Thanks for all your hard work! Here’s… half your paycheck.”

But weirdly? This usually makes Bitcoin more valuable. Why? Because fewer coins are being introduced into circulation, and people start to realize just how scarce it's becoming. That drives up demand, and boom — price goes up.

Scarcity = Value (Most of the Time)

So here’s the TL;DR: The harder it is to mine a coin — and the fewer coins that exist — the more valuable it can become. Not always, of course. Crypto is still the Wild West and prices can swing for a million reasons. But mining plays a big part in the economics of it all.

When it takes massive computing power, tons of electricity, and even water to mint a single coin? That coin doesn’t just represent value. It represents effort.

And that effort? That’s what a lot of people are betting on.

Is Mining Still Worth It?

So after all this talk about puzzles, power, and pickaxe-free mining — you might be wondering: Is it even worth it anymore?

Well… it depends.

Back in the Day…

There was a time (cue the nostalgic music) when you could mine Bitcoin on a regular old laptop in your dorm room or kitchen. It was kind of the Wild West — low competition, low costs, and high rewards. People were literally mining coins before breakfast and forgetting about them on hard drives. Those forgotten coins? Worth millions today. No joke.

But those days are long gone.

Now? Mining Bitcoin requires serious hardware, expensive electricity, a solid technical setup, and probably a cooling system that sounds like a jet engine. Solo mining is mostly out of reach unless you’re already deep in the game or part of a mining pool. The barrier to entry is high, and profits aren’t guaranteed.

Enter: Proof of Stake

On top of that, a lot of cryptocurrencies are moving away from mining altogether.

Take Ethereum, for example. It used to run on the same mining system as Bitcoin (called Proof of Work), but in 2022 it made the big switch to Proof of Stake — a whole new way of securing the network that doesn’t involve mining at all.

Instead of solving puzzles with powerful machines, Proof of Stake relies on people locking up their coins (aka staking) to help validate transactions. No fans, no heat, no electricity bills that make your eyes water.

So… Now What?

If you're just getting into crypto, mining isn’t the only way to get involved anymore. There are tons of other ways people are earning and building in the space:

Staking (like we just mentioned)
Buying and trading coins
Providing liquidity on decentralized exchanges
Earning interest through DeFi platforms
Flipping NFTs (high risk, but still a thing)
Even creating content or games that use blockchain tech

So while mining might still make sense for the pros with deep pockets and serious setups, it’s no longer the only game in town — and definitely not the easiest way to start.

What Gives Crypto Its Value?

So by now we know what crypto is, how it’s mined, and that people are using warehouse-sized computers to chase digital coins like it's the Gold Rush 2.0. But here’s the real question:

What actually gives crypto its value?

Like… it’s just code, right? It doesn’t exist in the physical world. You can’t hold it. You can’t put it in your sock drawer. You can’t even flip it like a quarter.

So why are people paying real money — sometimes a lot of it — for something that technically isn’t even “there”?

Let’s unpack it.

1. Scarcity: There’s Only So Much to Go Around

We touched on this in the mining post, but it’s worth repeating: a lot of cryptocurrencies are limited. Take Bitcoin — only 21 million will ever exist. That’s it. Hard stop. No one can print more. No secret stash waiting to be released.

This built-in scarcity makes it kind of like digital gold — limited supply + growing demand = rising value.

Humans naturally assign value to things that are hard to get. It's why diamonds cost more than gravel.

2. Trust and Community: Belief is a Big Deal

Believe it or not, trust plays a huge role in a coin’s value.

Crypto doesn’t rely on banks or governments. Instead, it relies on a network of people who all agree to use it, trade it, and trust that it works the way it’s supposed to. That shared belief? That’s value.

The more people who use and believe in a coin, the more valuable it becomes. It’s a little like social media — no one cared about Instagram at first, but once everyone piled in? Boom. Value.

3. Utility: What Can the Coin Actually Do?

Some coins exist just to be traded. Others have actual functions — like paying for things on a specific platform, powering smart contracts, or unlocking access to blockchain-based apps (dApps).

For example:

Ethereum (ETH) is used to run programs on the Ethereum blockchain.
Chainlink (LINK) connects real-world data to smart contracts.
Basic Attention Token (BAT) rewards users for watching ads on a crypto-powered browser.

Coins with a real-world use case tend to have more staying power — and more value — than coins that are just memes (though, let’s be honest, sometimes the memes do take off).

4. Supply and Demand: Classic Economics

At the end of the day, crypto follows the same basic rule as everything else in economics:

If more people want it and there’s not enough to go around, the price goes up.

This is why prices can swing so wildly. News, hype, fear, new laws, Elon Musk’s tweets — they can all shift demand in a split second. Crypto is still young and volatile, so prices can spike or crash fast.

5. Technology + Innovation

Behind every good crypto is a blockchain — and some blockchains are better than others.

If a coin is tied to a strong, fast, secure, and scalable blockchain network, investors and developers are more likely to trust it, build on it, and assign it more value. It's like real estate. Location matters. A solid blockchain is prime real estate in the digital world.

6. Speculation: Yes, Hype Plays a Role

Let’s be honest — not all crypto value comes from logical analysis and real-world use.

Sometimes, it’s just… hype. People jump in because they don’t want to miss out. Or because they saw someone else get rich. Or because Reddit told them to. (Looking at you, Dogecoin.)

It’s not always sustainable — but in the short term, it does affect value.

So… What Is Crypto Really Worth?

In short? Whatever people are willing to pay for it.

Crypto is a mix of scarcity, community trust, utility, innovation, and, yeah… a sprinkle of hype. It’s weird, exciting, unpredictable — and in some ways, very human. We create value by what we collectively believe in, and right now, a whole lot of people believe in the future of crypto.

Wrapping It Up: Crypto Isn’t Just Magic Internet Money

So now we’ve gone from “What even is crypto?” to “Whoa, people are solving math puzzles with supercomputers to make digital coins?” to “Okay… so that imaginary money actually has real value because of scarcity, trust, and utility.”

Not bad, right?

If you’ve made it this far, congratulations — you now understand more about crypto than most people who just nod and pretend they know what “blockchain” means.

We’ve covered:

✅ What crypto is

✅ How mining works (and why it’s not just dudes with pickaxes)

✅ Why mining is harder (and more intense) than ever

✅ How all this effort and tech translates into value

And the wild part? This is just the beginning. We haven’t even scratched the surface of staking, smart contracts, NFTs, Web3, or all the weird, exciting, and occasionally ridiculous stuff happening in this space.

But don’t worry — we’ll get there.

For now, take a deep breath and give yourself credit for diving into a world that’s confusing, evolving, and kind of mind-blowing. Because crypto isn’t just about money — it’s about rethinking how digital value, ownership, and trust can work.

And trust me — it’s only getting more interesting from here.

Let’s Connect

Thanks for reading! If you’d like to see more of my work, explore my full portfolio or connect on LinkedIn:

🔗 View My Portfolio → https://gennyallison.netlify.app
💼 Connect on LinkedIn → https://www.linkedin.com/in/genny-allison

I’m always open to freelance opportunities, collaborations, or full-time roles focused on AI-driven content, SEO, and high-performance web design.

What Does It Mean to "Mine" Crypto?

Table of contents