All About Bitcoin Mining Power

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

Remember 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 these huge computers and dozens of cooling fans is guessing at the target hash. Miners create these guesses by randomly generating as many"nonces" as possible, as quickly as possible. A nonce is short for"number only used once," and the nonce is the secret to generating these 64-bit hexadecimal numbers I keep talking about.

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

In theory you can 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 this

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 summary of everything that 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 to the Bitcoin community is they confirmed 1768 transactions for this block. 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's no minimum target, but there is a maximum goal set by the Bitcoin Protocol. No target can be higher than this number:

Here are some examples of randomized hashes and the standards 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 group of miners that combine their computing ability and split the mined bitcoin. Mining pools are somewhat similar to those Powerball clubs whose members purchase lottery tickets en masse and consent to discuss any winnings. A disproportionately large number of blocks are mined by pools rather than by individual miners. .

In other words, it is literally just a numbers game.  You cannot imagine the pattern or make a prediction based on previous 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 beneath the target is just 1 in 2,874,674,234,416--less than 1 in 2 trillion. .

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The aforementioned content site Cryptocompare delivers a helpful calculator that permits you to plug in numbers such as your hash rate, electricity costs etc., to estimate the costs and benefits.

Mining benefits are paid to the miner who finds a solution to the puzzle , and the probability that a participant will be the one to discover the solution is equal to the portion of the entire mining power on the network.  Participants which have 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 buy for a few thousand bucks would represent less than 0.001percent of the network's mining energy.  With such a small chance at finding the next block, it might be a long time before that miner finds a block, and also the difficulty going Our site up makes things even worse.  The miner may never recover their investment.  The answer to this problem 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 find a steady flow 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 mentioned, the easiest way to get Bitcoin is to buy it on an exchange like Coinbase.com. Alternately, you can consistently 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 make the pickaxes taken for mining.

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