Coin Mining Hardware - The Facts

If you are 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 figure the entire value of a hash.

Bear in Mind that ELI5 analogy, in which I wrote the number 19 on a piece of paper 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 these tremendous computers and dozens of cooling fans is guessing at the 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 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 Attain the same goal by rolling a 16-sided expire 64 days to Reach random numbers, but why on earth would you want to do that

The screenshot below, taken from the website Blockchain.info, might help you put all of this information together at a glance. You are 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 that they confirmed 1768 transactions for this cube. If you really want to see all 1768 of these transactions for this block, then go to this page and scroll down to the heading"Transactions." .

There's 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 standards for whether they will lead to achievement for the miner:

You would have to get a fast 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 comparable to those Powerball clubs whose members buy lottery tickets en masse and agree to share any winnings. A disproportionately high number of blocks are mined by pools rather than by individual miners. .

In other words, it's literally just a numbers game.  You cannot guess the pattern or make a prediction based on previous 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 target is 1 in 2,874,674,234,416--significantly less than 1 in 2 trillion. .

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

Mining benefits are paid to the miner who discovers a solution to the puzzle first, and also the probability 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 click to investigate which have 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 to get a couple thousand bucks would represent less than 0.001percent of the network's mining energy.  With such a small chance at finding the next block, it might be a long time before that miner finds out a block, and also the difficulty going up makes things even worse.  The miner may never recoup their investment.  The answer to this predicament 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 flow 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 discussed, the easiest way to get Bitcoin is to purchase it on an exchange such as Coinbase.com. Alternately, you can always leverage the"pickaxe strategy". 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 used for Bitcoin mining. You can start looking into companies that make ASICs miners or GPU miners. .