What Does Bitcoin Mining Efficiency Mean?

If you're 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 total value of a hash.

Bear in Mind that ELI5 analogy, in which I composed the number 19 on a piece of newspaper and put it in a sealed envelope

In Bitcoin mining terms, that metaphorical undisclosed number in the envelope is known as the objective hash.

What miners are doing with these tremendous computers and dozens of cooling fans is guessing at the target hash. Miners create these guesses by randomly generating as many"nonces" as possible, 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 given credit for completing that block, and is awarded the spoils of 12.5 BTC. .

In theory you can achieve the same goal by rolling a 16-sided expire 64 times 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 of this information together in a glance. You are looking at a summary of everything that happened when obstruct #490163 was mined. The nonce that generated the "winning" hash was 731511405. The goal 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 those transactions for this block, then go to this page and scroll down to the heading"Transactions." .

There's no minimum target, but there's a maximum goal set by the Bitcoin Protocol. No goal can be greater than this number:

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

You would have to find a speedy mining rig , more realistically, join a advice mining pool--a group of miners that combine their computing ability and split the mined bitcoin. Mining pools are similar to people Powerball clubs whose members purchase lottery tickets en masse and agree to discuss any winnings. A disproportionately large number of blocks are mined by pools rather than by individual miners. .

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

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The aforementioned site Cryptocompare offers a very helpful calculator which permits you to plug my link in numbers like your hash rate, electricity prices etc. to estimate the costs and benefits.

Mining benefits are paid to the miner who discovers a solution to the puzzle first, and the likelihood that a participant will be the one to discover the solution is equal to the portion of the entire 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 bucks would represent less than 0.001percent of the network's mining power.  With such a tiny chance at finding the next block, it might be a long time before that miner finds a block, and the difficulty going up makes things even worse.  The miner may never recover their investment.  The answer to this predicament is mining pools.  Mining pools are operated by third parties and coordinate groups of miners.  By this link working together in a pool and sharing the payouts amongst participants, miners can find a steady flow of bitcoin starting the afternoon that they trigger their miner.  Statistics on some of the mining pools can be seen on Blockchain.info. .

Sure. As discussed, the simplest way to acquire Bitcoin is to purchase it on an exchange like Coinbase.com. Alternately, you can consistently 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 goldbut instead to create the pickaxes taken for mining.

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