All About Bitcoin Mining Efficiency

If you are mining Bitcoin, you do not need to figure 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, in which I composed 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 called the objective 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 possible, 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.

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

In theory you could achieve the Exact Same goal by rolling a 16-sided expire 64 times to Reach random numbers, but why on earth would you want to do this

The screenshot below, taken by the site Blockchain.info, might enable you to put all of this information together in a glance. You're looking at a summary of everything which happened when block #490163 was mined. The nonce that generated the "winning" hash was 731511405. The target 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 find all 1768 of those transactions for this block, then go to this page and scroll down to the heading"Transactions." .

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

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

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

In other words, it's literally only 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 1 in 2,874,674,234,416--less than 1 in two trillion. .

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

Mining benefits are paid into the miner who discovers a solution to the puzzle first, and also the probability that a participant will be the one to find the solution is equal to the portion of the total mining power on the network.  Participants with 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 dollars would represent less than 0.001percent of the network's mining energy.  With such a check my site tiny chance at finding the next block, it could be a long time before that miner finds a block, and the difficulty going 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 they activate their miner.  Statistics on some of the mining pools can be seen on Blockchain.info. .

Sure. As discussed, the simplest way to acquire 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 smart investment was not to pan for gold, but instead to make the pickaxes used 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 or GPU miners. .