Mining is a transaction record process with bitcoins to blockchain – the public database of all the operations with Bitcoin, which is responsible for the transaction confirmation. Network nods use blockchain to differ the real transactions from the attempt to spend the same facilities twice. The main mining objective is reaching a consensus between network nods on which transactions consider legitimate.
- Category: Mining
Transaction record process
Besides this, mining is the only way of bitcoins emission that are allocated as a miner reward for the mathematical task solution with the help of computer equipment. The process is advisedly done resource-intensive and difficult to leave permanent the number of blocks found by miners.
Every block should contain the confirmation that the mathematical task has been solved and each of the network nods can easily check, if the block has been really closed by the rules. Emission is decentralized as a mining reward that means a control absence over the output by a single center. During this process miners confirm accomplishing transactions in the network. In order to protect the network from overruns, mining is possible in strictly defined capacities.
Bitcoins, issued with the help of mining are the best way to hold the transaction anonymity during the work with crypto-currency. Nevertheless, they can be used only after getting 100 network confirmations.
All the transfers in the Bitcoin system are public. Miners’ work consists in choosing the right hash, which will be convenient to all the network transactions and will provide getting of the private key. There are millions of possible combinations and that's why the process usually takes time and demands powerful equipment.
Unknown hash is the quantity that consists of the previous block hash, a random number and transactions check value sum, made during 10 minutes. System conditions can satisfy the only one quantity, which isn't permanent and changes after each block is closed.
As soon as the right hash is defined the transaction block closes and the miner obtains reward in the amount of 25 bitcoins. This process can be compared with lottery, because a lot of participants are simultaneously searching the hash. The system works pursuant to the strict rules and according to them changing of closed block is practically impossible.
- Main page: Pooled mining
Bitcoin mining is a very difficult process and it's necessary to have essential capacities for processing. It has become practically impossible to follow mining alone, because of permanent increasing mining difficulty and crypto-currency market development. As a result, the concept “pool mining” has appeared, which means the computational capacities banding of several participants in a group for the new block generation. The pool obtained reward for the closed block is shared between its participants.
For the long time mining has been available for home computers users, but in 2013 competition between miners for finding the right hash has increased, therefore personal mining has lost it's economic justifiability. During the development and modernization process the next computer equipment types have been used for mining:
- CPU-mining is a one of the oldest versions working with the help of the computer processor. This option can be found in the main bitcoin client, but it's off-stream now because of the extra low effectiveness;
- GPU-mining lies in using graphic card. This type of mining has changed the processors. It's hallmark is the increasing of system power;
- FPGA-mining is an upgrade variant of GPU mining, which differs by lower energy consumption;
- ASIC is a mining with a special equipment created specially for work with crypto-currency. Its effectiveness far exceeds the attributes of usual graphic cards, so it has inaugurated a new era in Bitcoin development.