What is mining ?

In this article we will introduce you quickly what mining means because there are already many other articles on this subject on the internet.


What does it mean to undermine cryptocurrencies?

 

Summary definition :

Before you understand what a minor is, you must already know what a crypto-currency is.
A cryptocurrency is a decentralized digital currency, which means that it does not belong to anyone, therefore neither to banks nor to governments.
The “mother” cryptocurrency is Bitcoin, then over time there have been other digital currencies to compete with Bitcoin, they are called “Altcoins”.
“Inside” (source code) of each cryptocurrency (even Bitcoin) there is a maximum limit of available corners. (21 million for Bitcoin)
A miner will then extract the corners, validate the transactions from this database (blockchain) and secure the network with complex calculations that your hardware will have to solve according to the algorithm in relation to the crypto-currency that we will undermine.

In concrete terms, this means that your hardware (graphics card, processor, ASIC) will work to mine just like a gold miner would, except that in the case of digital mining, it is virtual.


A little more details :

At the time, when the Bitcoin was created by Satoshi Nakamoto it was possible to mine Bitcoins, today it is not possible for a private individual and even for a professional in France it is not profitable, it is for this reason that today all miners will mine other cryptocurrencies then transform them into Bitcoin in order to exchange them in local currency or exchange them with other cryptocurrencies (Altcoins).

The Altcoins are “identical” to the Bitcoin which is the founding father of crypto-coins, the goal being to make a crypto-coin capable of being better than the Bitcoin or to have a different utility, many Altcoins were born and it is therefore what we will see in the articles present on Cryptos-Mining.

Bitcoin was created in 2008 and it was possible to mine directly with a simple computer in 2009, its value and difficulty being very low, it was possible to mine BTC very quickly without having a large computing power, this is how we talk about difficulty, we will come back to it in the paragraph on difficulty and profitability.
A little anecdote, many people mined Bitcoins in 2009 and kept them, a few years later when the Bitcoin rose to a huge value, these people sold it all and became millionaires, today it is very unlikely to be able to do this unless they mine or invest in a crypto-currency when it was released and keep this crypto-currency several years and then sell it.

Same thing for Ethereum, Altcoin created by Vitalik Buterin which is the most known, at its launch (July 30, 2015) 1 Ether was not even worth 1$ (0.6$) and 1 ETH today is slowly approaching the 600$ at the writing of its lines, knowing that at the time with a power of 120 mhs (4 graphic cards) one could undermine this:

What to Mine

Obviously this calculation is wrong because the Bitcoin was not worth this and the Ether too, it simply serves to know the number of Ether that could be undermined with this power at launch.

Cryptos-Mining focuses only on mining via GPU (graphics card) which is more focused for “individuals”, this is the case with Ethereum to take the example above.

Currently there are more than 16 million (soon 17) BTCs in circulation for a total of 21 million possible maximum, the algorithm was created this way.
The 21 million BTC will be mined in about 2140.

Whether mining Bitcoin or Altcoins, the principle remains the same and only the material to mine changes.
There are PoW (proof of work) and PoS (proof of stake) currency cryptos and they are impossible to mine.
Here we will look at possible cryptocurrencies to mine via GPU (graphics card)

For more information about the BTC : Wikipedia


According to Wikipedia, mining is explained this way:

The mining operation consists of assembling transactions into “blocks”, adding a header that contains the size of the block, the number of transactions it contains, the date and time, a checksum (“hash”) that will prevent any modification of the block and will also serve as a unique identifier to the block, and the identifier of the previous block.

Minors include in their blocks a particular transaction that credits them with a number of bitcoins created for this purpose, as well as transaction fees offered by their issuers. However, this remuneration will only be effective if the block is definitively accepted in the block chain by the other nodes. It is this creation of money that explains the use of the term “mining”, by analogy with gold mining.

A block can contain any number of transactions, typically between 1000 and 2000, but without the block size exceeding 1 megabyte.

In a block, transactions are stored as a Merkle tree.

The checksum (or fingerprint) of the block is calculated by applying two successive times the hash algorithm SHA-256 to the set formed by the following elements <:

  • Software version number
  • The header fingerprint of the previous block
  • The root of the block transaction tree (which is itself an indirect footprint of all block transactions)
  • The time stamp (time elapsed since January 1, 1970 0 h, in seconds)
  • The difficulty
  • The calculation of this fingerprint is made particularly difficult by imposing that it be less than a certain value (the “difficulty”), therefore that its binary representation begins with a certain number of zeros. For this, the header is supplemented by an arbitrary 32-bit number called “nuncio”, which will be integrated into the calculation of the fingerprint.

A property of hash algorithms is that, even knowing the fingerprints obtained with some nonces, it is impossible to determine the value of the fingerprint with a new nonce without re-running the algorithm. A suitable nuncio can therefore only be found by successive trials.

For a given nuncio value, the probability of calculating a footprint less than the difficulty is very low, and therefore many attempts must be made. Between 2014 and 2016, the average number of nunces each miner had to test between each block creation rose from 1 billion to 200 billion71. As this calculation consists in performing a very large number of times the same calculation with different data, it lends itself well to parallel calculation.

The difficulty is readjusted every 2016 blocks to take into account the real computing power of the network and allow on average to add a block every 10 minutes, which means that the probable time to calculate a valid footprint is 10 minutes for the most powerful computer or group of computers on the network.

This system of proof of work and linking of blocks by their footprint makes any alteration of the block chain impossible. An attacker who wishes to modify a transaction in a given block would have to recalculate his checksum and those of all subsequent blocks. Since the difficulty increases with time, as well as the number of blocks that follow the changed transaction (its degree of confirmation), the time required for such a change increases very rapidly.

When a miner has built a valid block whose checksum satisfies the difficulty condition, he plays it to neighboring nodes, which check its validity before playing it again.

Valid blocks are thus distributed from one node to the next to all nodes of the network, after having been checked each time, but without being modified. From the nuncio included in the header, it is easy and quick to check the validity of the block (a simplistic parallel can be made to a Sudoku game: its resolution is difficult and requires time and human calculation but its verification is very easy once the solution is found).


If you have any questions, if you think something important is missing to add or correct, feel free to write a comment.

Co-Founder of Cryptos-Mining and passionate about Blockchain and new technologies.

I am also for a group of 3,000 employees. I have network, system and security skills.

I write detailed articles, guides and tips about cryptocurrency mining.



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