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Bitcoin Mining Power Fundamentals Explained


If you are 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 figure the total value of a hash.

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

In Bitcoin mining terms, that metaphorical undisclosed number in the envelope is known as the target hash.

What miners are doing with these huge computers and dozens of cooling fans is guessing at the hash. Miners create 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 key 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 awarded the spoils of 12.5 BTC. .

In theory you could achieve the Exact Same aim by rolling a 16-sided expire 64 days to arrive at random numbers, but why on earth would you want to do that

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The screenshot below, taken from the website Blockchain.info, might help you put all of this information together at a glance. You are looking at a list of everything which 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 that they confirmed 1768 transactions for this block. If you really want to find all 1768 of these transactions for this block, then go to this page and scroll down to the heading"Transactions." .

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

Here are some examples of randomized hashes and also the standards for if they will lead to success for the miner:

You'd have to get a fast mining rig or, more realistically, join a mining pool--a bunch of miners that combine their computing ability and divide the mined bitcoin. Mining pools are somewhat similar to people Powerball clubs whose members purchase lottery tickets en masse and consent to discuss any winnings. A disproportionately high number of blocks are mined by pools rather than by individual miners. .

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

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The aforementioned website Cryptocompare offers a helpful calculator which allows you to plug in numbers like your hash speed, power prices etc. to estimate 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 discover the solution is equal to the portion of the total mining power on the network.  Participants with a small percentage of the mining capability stand a very small chance of discovering the next block on their own.  For instance, a mining card that one could purchase for a couple 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 could be a long time before that miner finds a block, and also Recommended Site the problem going up makes things even worse.  The miner may never recover their investment.  The answer to this predicament is mining pools.  Mining pools are run by third parties and coordinate groups of miners.  By working together in a pool and sharing the payouts amongst participants, miners can get a steady stream of bitcoin starting the afternoon that they activate their miner.  Statistics on some of the mining pools can be seen on Blockchain.info. .

Sure. As discussed, 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 wise investment was not to pan for gold, but rather to create the pickaxes used for mining.

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

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