28. Mining

This chapter provides a comprehensive overview of mining in the context of proof-of-work-based consensus mechanisms, which represent the backbone for Bitcoin and many other crypto assets. We first discuss miners’ incentives, the critical role of mining for security, and key design aspects such as difficulty adjustment. Subsequently, we explore the historical evolution of mining, including the emergence of specialized hardware and mining pools. Finally, we examine the economic implications and security issues related to Bitcoin's halving events and dissect controversies around the environmental impact and (de-)centralization tendencies of cryptocurrency mining.