What is Mining? An In-depth Analysis of 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 avenue for participants to earn rewards. 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 blockchain networks like Bitcoin and early Ethereum. Its core logic is to compete for the right to record transactions through computation.

• Process: Miners repeatedly adjust the Nonce value in the block header using mining machines to perform hash calculations, with the goal of generating a hash value that is less than the target value specified by the network (for example, the first 18 digits are 0). The miner who first finds the correct value is granted the right to package the block and receive rewards (block tokens + transaction fees).
• Resource consumption: Due to reliance on “brute force exhaustion”, POW requires strong computational power support, leading to high mining machine costs and huge electricity consumption. For example, the annual electricity consumption of the Bitcoin network exceeds 120 billion kWh, comparable to the energy consumption of a medium-sized country.
• Centralization Risk: Computational power is gradually concentrating in large mining pools, posing a security risk of a 51% attack (malicious control of majority computational power to alter transactions).

##POS Mining: The Rights Game for Holders To address the energy consumption and fairness issues of POW, Proof of Stake (POS) has emerged. Its core is that the probability of accounting is determined by the amount of coins held and the duration of holding them:

• Core Concept:
  • Coin age = Holding amount × Holding days (e.g., holding 100 coins for 30 days = 3000 coin age).
  • The probability of a validator being selected ≈ the proportion of its own stake (amount of tokens held / total amount in the network).
• Advantages:
  • Energy-saving: No need for high-performance mining machines, extremely low power consumption.
  • Anti-centralization: The more dispersed the distribution of tokens, the more secure the network, avoiding 51% hash power monopoly.
• Case Study:
  • Ethereum 2.0: Users need to stake 32 ETH to become a validator node, with an annual yield of approximately 4%–18% (fluctuating based on total staked amount).
  • Filecoin uses PoSt (Proof of Spacetime): replacing computational power with effective storage space, further promoting green mining.

POS Mining Pool: A Participation Channel for Small Holders

To lower the individual participation threshold, POS mining pools improve overall yield stability by aggregating user rights:

• Operating Model: Users delegate tokens to the mining pool, which participates in verification as a super node, and the earnings are distributed proportionally (after deducting fees).
• Advantages:
  • Eliminate the technical complexity of building your own node;
  • Supports small amount staking (e.g., minimum 0.01 coins for Dash mining pool);
  • Avoid the risk of penalties caused by personal verification errors.

##Gate Launchpool: A New Model of “Staking Mining” Without Mining Machines Gate Launchpool is a staking-to-mine service launched by the trading platform, where users do not need to purchase hardware and can obtain new project token airdrops by staking existing tokens:

• Participation Process:
  1. Complete identity verification on Gate;
  2. Stake USDT, BTC, or project tokens (such as ENA) to the designated pool;

3. Receive new token rewards daily based on staking proportion, automatically credited to the account.

• Advantages and Risks:
  • Low threshold (minimum 0.1 USDT), flexible redemption, real-time earnings;
  • Projects are mostly in the early stages, with significant token price fluctuations; be wary of technical or regulatory risks.

##Summary: The Core Logic of Mining Evolution POW to POS, shifting from “hash power competition” to “stake competition”, reducing energy waste and enhancing the decentralization of the network; from POS mining pools to Gate Launchpool, promoting user participation in ecosystem construction through professional node operation to “one-click staking”.

As carbon neutrality becomes a global goal, POS and derivative mechanisms (such as PoSt) are more favored by policies due to their low energy consumption characteristics. Innovative models like Gate Launchpool make “everyone can mine” a reality - holding tokens means participation, and holding tokens means profit.

Author: Blog Team *This content does not constitute any offer, solicitation, or recommendation. You should always seek independent professional advice before making any investment decisions. *Please note that Gate may restrict or prohibit all or part of the services from restricted areas. Please read the user agreement for more information, link: