A simple guide on Bitcoin mining and how it works? - FOGWHY

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Friday, October 23, 2020

A simple guide on Bitcoin mining and how it works?


 

Bitcoin mining, by simple definition, is the process by which blocks of transactions are added to the blockchain network and verified.


It is also the process by which new Bitcoin is generated, and Bitcoin mining is a mechanism that secures the integrity of the blockchain and stimulates participation in the network.


In other words, the mining process is about verifying the transactions that take place on the Bitcoin blockchain, and when the verification process is complete, it is automatically added to the blocks that make up the blockchain.


Miners compete to add new blocks to the blockchain.


The mining process requires a great commitment on the part of miners, as the process is an expensive and time-consuming task, and it is a necessary task for Bitcoin to work and people can trust its legitimacy.


Bitcoin was created more than a decade ago by the so-called “Satoshi Nakamoto” and since then people have heard about the mining process and what does it mean?


In this article we will try to explain and simplify the mining process and how it works.


What is Bitcoin mining?

Bitcoin mining is not like mining gold or coal deep underground.


Rather, the process is done by computers in a clean environment, as the term mining in the cryptocurrency market refers to verifying transactions made using Bitcoin.


Miners or miners are the individuals or companies that support the auditing of the Bitcoin blockchain network.


These miners do this by validating transactions that are grouped into blocks and then added to the blockchain.


These miners are rewarded with Bitcoin for their verifications.


It is worth noting that the Bitcoin mining process is not as cheap as it used to be, but this does not prevent investors from taking part in this activity.


To motivate and keep participants to do the mining process, they are incentivized with Bitcoin bonuses.


Since the mining process is carried out by different people across different parts of the world, Bitcoin remains decentralized, which means that the mining process does not depend on any central authority such as the government or the bank for its credibility.


Why does Bitcoin need two miners?

Mining is the process of auditing and verifying Bitcoin transactions to prevent the problem of "double spending".


Double spending means when someone with a cryptocurrency tries to spend the same currency twice.


In traditional currencies, there is no such problem as it is not possible to buy a cup of coffee for $ 5 and then go to another store and buy a grocery for the same $ 5.


But with bitcoin it is possible, as there is a risk that someone with bitcoin will make a copy of the bitcoin and send it to the merchant instead of the real currency.


In the real world, a store cashier looks at the $ 100 bill to make sure it is not counterfeit and this is what bitcoin miners try to do with cryptocurrency as well as they check to make sure not to make a transaction twice.


How does Bitcoin mining work:

The Bitcoin mining process works as follows:


The miner's computer, called the node, collects and fills individual Bitcoin transactions from the last ten minutes into a block.

This node competes with other nodes in the network to solve a complex cryptographic problem and is the first to validate the new block configured to enter the blockchain.

First Metal broadcasts problem solving and success to the entire network.

Other nodes check if their solution is correct, and if so, the new block is added to the blockchain and the entire process begins again.

The first miner to solve the problem is the one to be rewarded with bitcoin.

Mining machines run a "hash cipher" function on the head of the block.


What this means is that each mineral creates a "mass filter" with uncertain coefficients.


This block includes a block header that summarizes the data within the block, along with a reference to an existing block in the blockchain (this reference is called nonce), which is a one-time only number.


In Bitcoin, the nonce is an integer number that lies between 0 and 4,294,967,296.


This nonce block head is then placed through the "SHA256" hash function. If the resulting number is higher than the current target's hash, the metal adjusts the nonce and tries again.


The mineral does this several thousand times a second.


This means the degree of difficulty, which is adjusted every 2016 blocks (approximately every two weeks), to ensure that the block is mined on average once every 10 minutes.

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