An Unbiased View of Bitcoin Mining Efficiency

If you're mining Bitcoin, you do not need to figure the total 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 wrote 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 called the objective hash.

What miners are doing with those huge computers and dozens of cooling fans is guessing in the target hash. Miners make these guesses by randomly generating as many"nonces" as you can, 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 that is less than or equivalent to the target hash is given credit for completing that obstruct, and is awarded the spoils of 12.5 BTC. .

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

The screenshot below, taken from the site Blockchain.info, might help you put all of this information together in a glance. You are looking at a summary of everything that happened when obstruct #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 truly want to find 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 is a maximum target set by the Bitcoin Protocol. No target can be higher than this number:

Here are some examples of randomized hashes and the criteria 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 power and split the mined bitcoin. Mining pools are somewhat comparable to those Powerball clubs whose members buy 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 imagine the pattern or make a prediction based on previous goal hashes. The difficulty level of the most image source 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 goal is just 1 in this page 2,874,674,234,416--significantly less than 1 in 2 trillion. .

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

Mining benefits are paid into the miner who discovers a solution to the puzzle , and also the likelihood that a participant will be the one to discover the solution is equivalent to the portion of the entire mining energy on the network.  Participants which have a small percentage of the mining power stand a tiny chance of discovering the next block on their own.  For instance, a mining card that one could purchase for a few thousand bucks would represent less than 0.001% of their network's mining energy.  With such a tiny chance at finding the next block, it might be a long time before that miner finds out a block, and also the problem going up makes things even worse.  The miner may never recoup 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 trigger their miner.  Statistics on a few of the mining pools can be seen on Blockchain.info. .

Sure. As discussed, the easiest way to acquire Bitcoin is to purchase it on an exchange like Coinbase.com. Alternately, you can consistently leverage the"pickaxe plan". This relies on the old saw that during the 1848 California gold rush, the smart 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 used for Bitcoin mining. You can start looking into companies which make ASICs miners or GPU miners. .