Bitcoin Mining - How it Works & How to Get Started
Bitcoin Mining - How it Works & How to Get Started
What is Bitcoin Mining & How Does It Work? The Complete Guide
Everything you need to know about Bitcoin mining
Learn more about how bitcoin mining works
Getting started with Bitcoin mining
Bitcoin - The Currency of the Internet
A community dedicated to Bitcoin, the currency of the Internet. Bitcoin is a distributed, worldwide, decentralized digital money. Bitcoins are issued and managed without any central authority whatsoever: there is no government, company, or bank in charge of Bitcoin. You might be interested in Bitcoin if you like cryptography, distributed peer-to-peer systems, or economics. A large percentage of Bitcoin enthusiasts are libertarians, though people of all political philosophies are welcome.
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Bitcoin is an internet based decentralised currency. Similarly to Bittorrent, but Bitcoin uses a public ledger called the blockchain to record who has sent and received money. It's very new, and for many very confusing. BitcoinHelp aims to rectify this. Whether it be explaining how it works, how to use it, how to buy Bitcoins, how to integrate Bitcoins into your business. Sharing your successes as well as failures in order to help others is also gladly received. Ask away!
When you hear about bitcoin “mining,” you envisage coins being dug out of the ground. Butbitcoinisn’t physical, so why do we call itmining? Similar to gold mining, bitcoins exist in the protocol’s design just as the gold exists underground, but they haven’t been brought out into the light yet, just as the gold hasn’t yet been dug up. The bitcoin protocol stipulates that a maximum of 21 million bitcoins will exist at some point. What miners do is bring them out into the light, a few at a time. Once miners finish mining all these coins, there won’t be more coins rolling out unless the bitcoin protocol changes to allow for a larger supply. Miners get paid in transaction fees for creating blocks of validated transactions and including them in the blockchain. To understand how bitcoin mining works, let’s backtrack a little bit and talk about nodes. A node is a powerful computer that runs the bitcoin software and fully validates transactions and blocks. Since the bitcoin network is decentralized these nodes are collectively responsible for confirming pending transactions. Anyone can run a node—you just download the free bitcoin software. The drawback is that it consumes energy and storage space – the network at time of writing takes hundreds of gigabytes of data. Nodes spread bitcoin transactions around the network. One node will send information to a few nodes that it knows, who will relay the information to nodes that they know, etc. That way, the pending transaction ends up getting around the whole network pretty quickly. Some nodes are mining nodes,usually referred to as miners. These chunk outstanding transactions into blocks and add them to the blockchain. How do they do this? By solving a complex mathematical puzzle that is part of the bitcoin program, and including the answer in the block. The puzzle that needs solving is to find a number that, when combined with the data in the block and passed through a hash function (which converts input data of any size into output data of a fixed length, produces a result that is within a certain range. For trivia lovers, this number is called a “nonce”, which is an abbreviation of “number used once.” In the blockchain, the nonce is an integer between 0 and 4,294,967,296. How do they find this number? By guessing at random. The hash function makes it impossible to predict what the output will be. So, miners guess the mystery number and apply the hash function to the combination of that guessed number and the data in the block. The resulting hash starts with a certain number of zeroes. There’s no way of knowing which number will work, because two consecutive integers will give wildly varying results. What’s more, there may be several nonces that produce the desired result, or there may be none. In that case, the miners keep trying but with a different block configuration. The difficulty of the calculation (the required number of zeros at the beginning of the hash string) is adjusted frequently, so that it takes on average about 10 minutes to process a block. Why 10 minutes? That is the amount of time that the bitcoin developers think is necessary for a steady and diminishing flow of new coins until the maximum number of 21 million is reached (expected some time in 2140). The first miner to get a resulting hash within the desired range announces its victory to the rest of the network. All the other miners immediately stop work on that block and start trying to figure out the mystery number for the next one. As a reward for its work, the victorious miner gets some new bitcoin. At the time of writing, the reward is 6.25 bitcoins per block, which is worth around $56,000 in June 2020. However, it’s not nearly as cushy a deal as it sounds. There are a lot of mining nodes competing for that reward, and the more computing power you have and the more guessing calculations you can perform, the luckier you are. Also, the costs of being a mining node are considerable, not only because of the powerful hardware needed, but also because of the large amounts of electricity consumed by these processors. And, the number of bitcoins awarded as a reward for solving the puzzle will decrease. It’s 6.25 now, but it halves every four years or so (the next one is expected in 2024). The value of bitcoin relative to cost of electricity and hardware could go up over the next few years to partially compensate for this reduction, but it’s not certain. If you’ve made it this far, then congratulations! There is still so much more to explain about the system, but at least now you have an idea of the broad outline of the genius of the programming and the concept. For the first time we have a system that allows for convenient digital transfers in a decentralized, trust-free and tamper-proof way.
Hi guys I am looking for an article or something that walks through how exactly Bitcoin mining works. I have found many article that word about it but they were just concept, I am looking for a technical, computer science perspective, with the exact code for it. Thanks in advance
I made a comic explaining how bitcoin mining works. Feedback is appreciated!
Hi friends! I'm aspiring to make a series explaining the entire process of bitcoin in a comical and approachable way. I made a comic regarding how bitcoin mining works. It may contain errors, and it's a rough draft, but feedback is greatly appreciated! I'm really interested in bitcoin and where it's going. Hopefully this will be a easier learning device for many, since bitcoin is very daunting. Enjoy! Link: http://imgur.com/a/4Caif
Essentially, a group of computers (nodes) gives a group of miners (pool of miners) a math problem. Most miners use a pool because mining solo drastically increases your variance. Each miner uses their hash power (computing power) to solve (hash) portions of the math problem (in bitcoin’s case, SHA-256 algorithm) until the block is mined. Think of a block as a page in a book. In bitcoins case, it’s new transactions on the network being added to the public ledger. Once the block is mined, miners are rewarded (BTC) based on how many shares (parts of the math problem) they contributed to the block.
Bitcoin mining is the process by which new bitcoins are entered into circulation, but it is also a critical component of the maintenance and development of the blockchain ledger. How it Works Three Easy Steps to Start Bitcoin Mining. 1 - SIGN UP. It's super simple. Sign up now and get free 100 GH/s trial to familiarize yourself with mining concepts. As soon as you’ve set up the account, you can start to mine your first coins using our Bitcoin Mining service! 2 - PURCHASE A PLAN. Choose your Mining Plan and make the payment. You can also use our calculator and ... How Bitcoin Mining Works. Before you start mining Bitcoin, it's useful to understand what Bitcoin mining really means. Bitcoin mining is legal and is accomplished by running SHA256 double round hash verification processes in order to validate Bitcoin transactions and provide the requisite security for the public ledger of the Bitcoin network. Bitcoin mining is complex, and yet very simple. You can learn more about how bitcoin mining works right here. Bitcoin mining is the process that processes transactions on the bitcoin blockchain, and creates new blocks. It is generally done by specialized machines, called ASIC miners. How Bitcoin Mining Works. Where do bitcoins come from? With paper money, a government decides when to print and distribute money. Bitcoin doesn't have a central government. With Bitcoin, miners use special software to solve math problems and are issued a certain number of bitcoins in exchange. This provides a smart way to issue the currency and also creates an incentive for more people to mine ...
How Bitcoin Works in 5 Minutes (Technical) - YouTube
#bitcoin #freebitcoin #earnbitcoin By Far The BEST Bitcoin Miner Software In 2020 (Profitable). This is a review on the most profitable, easy, and time-savin... Now that the price of Bitcoin has skyrocketed once again, many people will be looking to get involved. One possible way is through Bitcoin mining. There are ... Andreas Antonopoulos speaking about Bitcoin phenomenon and the Blockchain technology from the perspective of Bitcoin mining. Speech recorder at Massachusetts... The bitcoin network deals with this by collecting all of the transactions made during a set period into a list, called a block. It’s the miners’ job to confirm those transactions, and write ... This video is a brief explanation of how Bitcoin (BTC) mining works. Subscribe for more financial videos.