Cryptomining is a process that involves high-performance computers and cryptographic techniques to solve complex computational problems. This is done to verify and add transaction records (blocks) to a public ledger known as a blockchain. Once this process is completed, the miner receives some cryptocurrency as a reward.
For a better basic understanding of how cryptomining works, the following provides some insight into the technical context behind it.
Unlike centralized banking systems where each transaction is verified by the bank itself, transactions in a decentralized blockchain are stored in a public ledger on myriads of computers in different locations by multiple participants. All the computers in that network are called nodes, and they have the task of verifying and monitoring the transactions simultaneously.
Miners are individuals (nodes) that provide incredible computing power to solve hashing puzzles in order to add more new blocks to the blockchain.
A blockchain is a series of chained data blocks listed in chronological order. These blocks contain data transactions, including cryptographic hashes, and are chained sequentially to the end of the ledger.
Once a transaction takes place, it is bundled with others to form a list and then added to a new unverified block. Each unverified data block must then be verified by the miner nodes. Once a miner verifies a block, the verified block is added to the blockchain. The miner that verifies the block first notifies the other nodes and then receives some cryptocurrency as a reward.
To work out if cryptomining is profitable, you need to consider the cost of the hardware and electricity as well as the complexity associated with mining. You also have to factor in other considerations such as how the price of the cryptocurrency will affect potential rewards.