Cryptocurrencies based on blockchain technology are a type of digital currency. They are created by calculating mathematical problems. These calculations are performed and verified by participants in the system. Solving these problems requires enormous computing power, to get this computing power, miners have to be used as computers connected to the system. Because of this, the whole process consumes a lot of power.

The blockchain itself is a decentralised network that stores transactions in a series of blocks. Each individual block contains the hash of the previous block and the associated transaction history of the network. The blockchain is thus the protocol for recording all transactions and the security of the entire system.