The 2-Minute Rule for Coin Mining Hardware

Getting My Peer To Peer Bitcoin To Work


If you're mining Bitcoin, you do not need to figure the total value of the 64-digit number (the hash). I repeat: You do not need to calculate the entire value of a hash.

Remember that ELI5 analogy, in which I wrote the number 19 on a piece of paper and put it in a sealed envelope

In Bitcoin mining terms, that metaphorical undisclosed number in the envelope is called the objective hash.

What miners are doing with those huge computers and dozens of cooling fans is guessing in the hash. Miners make these guesses by randomly generating as many"nonces" as you can, as fast as possible. A nonce is short for"number only used once," and also the nonce is the secret to generating these 64-bit hexadecimal numbers I keep talking about.

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The first miner whose nonce generates a hash which is less than or equal to the target hash is given credit for completing that block, and is given the spoils of 12.5 BTC. .

In theory you could achieve the same goal by rolling a 16-sided die 64 times to Reach random numbers, but why on earth do you want to do that

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The screenshot below, taken from the site Blockchain.info, might enable you to put all of this information together at a glance. You're looking at a summary of everything which happened when block #490163 was mined. The nonce that generated the "winning" hash was 731511405. The goal hash is shown on top.

As you see here, their contribution into the Bitcoin community is that they confirmed 1768 transactions for this block. If you really want to find all 1768 of these transactions for this block, go to this webpage and scroll down to the heading"Transactions." .

There is no minimum target, but there's a maximum target set by the Bitcoin Protocol. No goal can be higher than this number:

Here are some examples of randomized hashes and the criteria for whether they will lead to achievement for the miner:

You would have to get a fast mining rig , more realistically, join a mining pool--a bunch of miners who combine their computing ability and divide the mined bitcoin. Mining pools are similar to those Powerball clubs whose members purchase lottery tickets en masse and consent to discuss any winnings. A disproportionately large number of cubes are mined by pools rather than by individual miners. .

In other words, it's literally just a numbers game.  You cannot imagine the pattern or make a prediction based on preceding target hashes. The difficulty level of the most recent block at the time of writing is 2,874,674,234,416, i.e. the chance of any more information given nonce producing a hash below the target is just 1 in 2,874,674,234,416--less than 1 in 2 trillion. .

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The aforementioned site Cryptocompare offers a helpful calculator which permits you to plug in numbers such as your hash rate, electricity prices etc. to gauge the costs and benefits.

Mining benefits are paid into the miner who finds a solution to the puzzle first, and also the probability that a participant will be the one to find the solution is equivalent to the portion of the total mining energy on the network.  Participants with a small percentage of their mining power stand a very small chance of discovering the next block on their own.  For instance, a mining card that one could purchase for a few thousand dollars would represent less than 0.001percent of the network's mining energy.  With such a small chance at finding the next block, it could be a long time before that miner finds out a block, and the difficulty going up makes things even worse.  The miner may never recover their investment.  The answer to this predicament is mining pools.  Mining pools are operated by third parties and coordinate groups of miners.  By working together in a swimming pool and sharing the payouts amongst participants, miners can get a steady stream of bitcoin starting the afternoon they activate their miner.  Statistics on a few of the mining pools can be seen on Blockchain.info. .

Sure. As discussed, the simplest way to get Bitcoin is to purchase it on an exchange such as Coinbase.com. Alternately, you can always leverage the"pickaxe strategy". This is based on the old saw that during the 1848 California gold rush, the wise investment was not to pan for goldbut instead to make the pickaxes used for mining.

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In a crypto context, the pickaxe equivalent would be a company that manufactures equpiment utilized for Bitcoin mining. You can look into companies which make ASICs miners or GPU miners. .

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