Crypto Minting is the process of adding new crypto tokens into circulation. This article takes an effort to explain How is crypto minted? What it does mean, and which assets can be minted.
What is Crypto Minting?
In general, the terms Mining and Minting were used in the creation of real-world coins. Gold and Silver were Mined first and then Minted into coins.
In Cryptocurrency, minting is referred to as adding new coins to circulation by using the Proof of Stake (POS) consensus mechanism. This involves verifying transactions in a blockchain and creating new blocks.
What is Proof-of-Stake?
Proof-Of-Stake (POS) is a consensus mechanism that involves staking pre-existing cryptocurrency, which means users who want to validate the transactions in exchange for cryptocurrency must wager a significant amount of their tokens. This amount is called his stake.
Individuals are randomly selected to verify the transactions, the more the amount an individual stakes the more the changes of his selection for verification.
Stakeholders cannot spend the amount they have staked, they risk losing their entire wager if they don’t abide by the rules of staking.
Which Assets can be Minted?
Both cryptocurrency and NFTs can be minted. The process of minting and staking is used for cryptocurrencies, but minting an NFT involves different steps.
How is Crypto Minted
Cryptocurrencies are minted by staking a certain amount of pre-owned crypto with the POS mechanism as mentioned above.
How is NFT Minted
To mint an NFT, users need to create a cryptocurrency wallet with Ethereum in it. There are many NFT platforms for different blockchains (Solana/ Avalanche etc), in our example, we will talk about Ethereum but the steps are similar for all other blockchains.
Next, the user needs to signup into the NFT platform(e.g. OpenSea) with their Ethereum wallet.
Upload the desired file, which can be an image or an audio file, for which you want to create(mint) an NFT.
Complete the transaction by paying the fee in ETH.
Congratulations! You have now successfully minted your NFT.