Peer To Peer Bitcoin - Questions

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

Bear in Mind that ELI5 analogy, where 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 target hash.

What miners are doing with those huge computers and dozens of cooling fans is guessing at the target hash. Miners make these guesses by randomly generating as many"nonces" as you can, as quickly 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.

How Ig Bonds can Save You Time, Stress, and Money.

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

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

The screenshot below, taken by the site Blockchain.info, might help you put all of this information together at a glance. You are looking at a list of everything that happened when obstruct #490163 was mined. The nonce that generated the "winning" hash was 731511405. The target hash is shown on the top.

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

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

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

You'd need to find a fast mining rig , more realistically, join a like this mining pool--a bunch of miners that combine their computing power and divide the mined bitcoin. Mining pools are comparable to those Powerball clubs whose members purchase lottery tickets en masse and agree to share any winnings. A disproportionately high number of blocks are mined by pools rather than by individual miners. .

In other words, it is literally only a numbers game.  You cannot guess 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 given nonce producing a hash below the goal is 1 in 2,874,674,234,416--significantly less than 1 in two trillion. .

Not known Details About Bitcoin Mining Power

The aforementioned site Cryptocompare offers a helpful calculator which allows you to plug in numbers like your hash speed, electricity prices etc., to estimate the costs and benefits.

Mining benefits are paid into the miner who discovers a solution to the puzzle , and also the likelihood that a participant is going to be the one to discover the solution is equivalent to the portion of the total mining energy on the network.  Participants which have 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 buy for a few thousand bucks would represent less than 0.001% of their network's mining power.  With such a small chance at finding the next block, it might be a long time before that miner finds a block, and the problem going up makes things even worse.  The miner may never recoup 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 flow of bitcoin starting the afternoon that they trigger their miner.  Statistics on a few of the mining pools can be seen on Blockchain.info. .

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

The Only Guide for Bitcoin Mining Power

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