What Is Mining? A Complete Guide to POW, POS, and Launchpool

In the world of blockchain, “Mining” is the core mechanism for maintaining network security and achieving transaction verification. It is both a way to issue new tokens and an important means for participants to earn profits. With the advancement of technology, the mining mechanism has gradually shifted from the early high-energy-consuming POW to the more environmentally friendly POS, while innovative platforms such as Gate Launchpool have further lowered the participation threshold for ordinary users.

POW Mining: The Arms Race of Computing Power

Proof of Work (POW) is the consensus mechanism of blockchains such as Bitcoin and early Ethereum. Its core logic is to compete for bookkeeping rights through computation:

• Process: Miners use mining machines to repeatedly adjust the Nonce value in the block header and perform hash calculations on the block, aiming to generate a hash value that is less than the network’s specified target value (for example, the first 18 digits are 0). The miner who first finds the correct value obtains the right to package the block and receive rewards (block tokens + transaction fees).
• Resource consumption: Due to its reliance on “brute force enumeration”, POW requires strong computing power support, resulting in high costs for mining machines and massive electricity consumption. For example, the annual electricity consumption of the entire Bitcoin network exceeds 12 billion kWh, comparable to the energy consumption of a medium-sized country.
• Centralized Risk: Hash power is gradually concentrating in large mining pools, posing a security risk of a 51% attack (malicious control of majority hash power to alter transactions).

POS Mining: The Rights Game for Token Holders

To address the energy consumption and fairness issues of POW, Proof of Stake (POS) has emerged. Its core principle is that the probability of accounting is determined by the amount of tokens held and the time.

• Core Concept:
  • Coin Age = Holding Amount × Holding Days (e.g., 100 coins held for 30 days = 3000 Coin Age).
  • The probability of a validator being selected ≈ The proportion of its own equity (amount of tokens held / total amount in the network).
• Advantages:
  • Energy saving: No need for high-performance Mining machines, very low power consumption.
  • Anti-centralization: The more dispersed the distribution of tokens, the safer the network, avoiding 51% power monopoly.
• Case Study:
  • Ethereum 2.0: Users need to stake 32 ETH to become a validator node, with an annualized return of approximately 4%–18% (fluctuates based on total staked amount).
  • Filecoin Using PoSt (Proof of Spacetime): replacing computing power with effective storage space to further promote green Mining.

POS Mining Pool: A Participation Channel for Small Holders

To lower the individual participation threshold, the POS Mining Pool enhances overall return stability by aggregating user rights:

• Operating Model: Users delegate tokens to the mining pool, which participates in validation as a super node, and profits are distributed proportionally (after deducting fees).

Advantages:

• Eliminate the technical complexity of building your own nodes;
  • Supports small amount staking (such as Dash Minimum of 0.01 coins for the mining pool;
  • Avoid the penalty risk caused by personal verification errors.

Gate Launchpool: A New Model of “Staking Mining” Without Mining Machines

Gate Launchpool is a staking and mining service launched by the trading platform, allowing users to obtain new project token airdrops by staking existing tokens without the need to purchase hardware:

Participation Process

1. Complete identity verification on Gate.
2. Stake USDT, BTC or project tokens (such as ENA) to the designated pool;
3. Earn new token rewards daily based on staking ratio, automatically credited to the account.

Advantages and Risks

• Low threshold (minimum 0.1 USDT), flexible redemption, real-time earnings;
• The projects are mostly in the early stages, with significant fluctuations in token prices, and one should be wary of technological or regulatory risks.

Summary: The Core Logic of Mining Evolution

From POW to POS, shifting from “competing computing power” to “competing rights and interests”, reducing energy waste and enhancing the degree of network decentralization; from POS mining pools to Gate Launchpool, transitioning from professional node operation to “one-click staking”, promoting inclusivity to encourage more users to participate in ecosystem development.

As carbon neutrality becomes a global goal, POS and its derivative mechanisms (such as PoSt) are favored by policies due to their low energy consumption characteristics. Innovative models like Gate Launchpool make “mining for everyone” a reality—holding coins means participation and earning.