A Biased View of Bitcoin Mining Power

If you are mining Bitcoin, you do not need to calculate the entire 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 composed the number 19 on a piece of newspaper and put it in a sealed envelope

In Bitcoin mining conditions, 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 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 also the nonce is the key to generating these 64-bit hexadecimal numbers I keep talking about.

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

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

The screenshot below, taken by the website Blockchain.info, might help you put all this information together at a glance. You're looking at a list of everything that happened when block #490163 was mined. The nonce that generated the "winning" hash was 731511405. The goal 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 see all 1768 of these transactions for this block, then go to this webpage and scroll down to the heading"Transactions." .

There is no minimum goal, but there's a maximum goal determined 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 the miner:

You'd have to find a speedy mining rig , more realistically, join a mining pool--a group of miners who combine their computing power and split the mined bitcoin. Mining pools are somewhat similar to people Powerball clubs whose members purchase lottery tickets en masse and consent to share 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 guess the pattern or make a prediction based on preceding goal 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 target is just 1 in 2,874,674,234,416--significantly less than 1 in two trillion. .

All about Coin Mining Hardware

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

Mining rewards are paid to the miner who discovers a solution to the puzzle first, and the likelihood that a participant is going to be the one to find the solution is equivalent to the portion of the entire mining energy on the network.  Participants which have a small percentage of their mining capability stand a tiny chance of discovering the next block on their own.  For instance, a mining card that one look what i found could buy to get a few thousand dollars would represent less than 0.001% of the 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 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 swimming pool and sharing the payouts amongst participants, miners can find a steady stream of bitcoin starting the day they activate their miner.  Statistics on some of the mining pools can be seen on Blockchain.info. .

Sure. As mentioned, the simplest way to get Bitcoin is to purchase it on an exchange like 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 goldbut rather to create the pickaxes taken for mining.

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In a crypto basics 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. .