rewrite this title What Are the Cryptocurrencies That Can’t Be Mined? – Metaverseplanet.net

Cryptocurrency mining is one of the most common methods of producing a cryptocurrency. In many blockchains that use the Proof-of-Work (PoW) consensus mechanism, such as Bitcoin (BTC) and Ethereum (ETH), miners who verify transactions and secure the network are rewarded with the cryptocurrency of the respective blockchain.

These rewards are called “block rewards.” Cryptocurrencies that are given as a block reward and produced by crypto mining are mineable cryptocurrencies. However, there are also cryptocurrencies that cannot be mined, meaning they are not produced by cryptocurrency mining.

Cryptocurrencies That Cannot Be Mined

Non-mineable cryptocurrencies, as the name suggests, refer to cryptocurrencies that are not produced through mining. Cryptocurrency mining involves miners verifying transactions using computational power to obtain new block rewards, thereby putting new coins into circulation.

The majority of non-mineable cryptocurrencies are usually already in circulation or will be offered by the company. Users can obtain them by purchasing these cryptocurrencies that are already available. Non-mineable cryptocurrencies that are offered for the first time can be purchased through an Initial Coin Offering (ICO).

Types of Cryptocurrencies That Cannot Be Mined

There are basically two types of non-mineable cryptocurrencies:

Cryptocurrencies that have reached their maximum supply

Cryptocurrencies that have not yet reached their maximum supply

Unmineable cryptocurrencies that have reached their maximum supply enter the market fully issued. All of these cryptocurrencies are typically offered for sale through an ICO. Users can buy these cryptocurrencies through an ICO or later on cryptocurrency exchanges.

Cryptocurrencies that have not reached their maximum supply and cannot be mined are not fully issued from the beginning. These are usually cryptocurrencies that use the Proof-of-Stake (PoS) consensus mechanism. In this mechanism, transactions are verified by validator nodes and added to the blockchain. To become a validator on the network, it is necessary to stake the cryptocurrency of the respective blockchain. Cryptocurrencies that have not yet been issued are given to validators as block rewards in exchange for staking.

What Are the Cryptocurrencies That Cannot Be Mined?

There are many non-mineable cryptocurrencies in the blockchain and cryptocurrency industry. Some of the most well-known include:

Ripple (XRP)

Solana (SOL)

Terra (LUNA)

Cardano (ADA)

Polkadot (DOT)

Avalanche (AVAX)

You May Also Like

Copy URL
URL Copied