Bitcoin Mining Efficiency - Questions

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 figure the entire value of a hash.

Remember that ELI5 analogy, where 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 those huge computers and dozens of cooling fans is guessing in the 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 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 equal to the target hash is awarded credit for completing that obstruct, and is given the spoils of 12.5 BTC. .

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

The screenshot below, taken from the website Blockchain.info, might enable you to put all of this information together at a glance. You're looking at a summary of everything that 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 into 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, then go to this page and scroll down to the heading"Transactions." .

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

Here are some examples of randomized hashes and also the criteria for whether they will lead to achievement for the miner:

You'd need to find a fast mining rig or, more realistically, join a mining pool--a bunch of miners who combine their computing power and divide the mined bitcoin. Mining pools are comparable to people Powerball clubs whose members buy lottery tickets en masse and consent to discuss any winnings. A disproportionately high number of blocks are mined by pools rather than by individual miners. .

In other words, it is literally just a numbers game.  You click cannot guess the pattern 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 beneath the target is just 1 in 2,874,674,234,416--significantly less than 1 in two trillion. .

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The aforementioned site Cryptocompare delivers a very helpful calculator which permits you to plug in numbers such as your hash speed, electricity prices etc., to gauge the costs and benefits.

Mining rewards are paid into the miner who discovers a solution to the puzzle first, and the probability that a participant is going to be the one to find the solution is equal to the portion of the entire mining power on the network.  Participants which have a small percentage of their mining capability stand a very small chance of discovering the next block on their own.  For instance, a mining card that one could purchase to get a couple thousand dollars 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 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 operated by third parties and coordinate groups of miners.  By working together in a pool and sharing the payouts amongst participants, miners can get a steady stream 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 simplest way to acquire Bitcoin is to buy it on an exchange like Coinbase.com. Alternately, you can always leverage the"pickaxe plan". This relies on the old saw that during the 1848 California gold rush, the wise 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 are a company that manufactures equpiment used for Bitcoin mining. You can look into companies that make ASICs miners or GPU miners. .