The 5-Minute Rule for Coin Mining Hardware

If you are 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 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 target hash.

What miners are doing with these huge computers and dozens of cooling fans is guessing at the target hash. Miners make these guesses by randomly generating as many"nonces" as you can, as fast as possible. A nonce is short for"number only used once," and 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 which is less than or equal to the target hash is awarded credit for completing that block, and is given the spoils of 12.5 BTC. .

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

The screenshot below, taken from the site Blockchain.info, might help you put all this information together at a glance. You're looking at a list of everything which happened when obstruct 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 that they confirmed 1768 transactions for this block. If you really want to find all 1768 of those transactions for this block, go to this page and scroll down to the heading"Transactions." .

There is no minimum target, but there is a maximum target determined by the Bitcoin Protocol. No goal can be higher 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 need to find a speedy mining rig or, more realistically, join a mining pool--a group of miners who combine their computing power and split the mined bitcoin. Mining pools are similar to people Powerball clubs whose members purchase lottery tickets en masse and agree to share any winnings. A disproportionately large number of blocks are mined by pools rather than by individual miners. .

In other words, it's literally only a numbers game.  You cannot imagine the pattern Visit This Link or make a prediction based on preceding 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 below the goal is just 1 in 2,874,674,234,416--significantly less than 1 in 2 trillion. .

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

Mining rewards are paid to the miner who finds a solution to the puzzle , and also the likelihood that a participant is going to be the one to find the solution is equivalent to the portion of the total mining energy on the network.  Participants with 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 purchase for a few thousand dollars would represent less than 0.001% of the network's mining energy.  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 difficulty going up makes things even worse.  The miner may never recoup their investment.  The answer to this problem is mining pools.  Mining pools are operated 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 afternoon they trigger their miner.  Statistics on some of the mining pools can be seen on Blockchain.info. .

Sure. As discussed, the simplest way to get Bitcoin is to purchase it on an exchange such as Coinbase.com. Alternately, you can consistently leverage the"pickaxe plan". This is based 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 taken for mining.

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