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BusinessThe Ultimate Guide to Bitcoin Mining

The Ultimate Guide to Bitcoin Mining

The integrity of the Bitcoin Blockchain goes a long way in determining the security of Bitcoin. Despite the fact that every bitcoin transaction can be verified by simply walking through the chain, preventing double expense and other illicit activity, on the other hand, requires that there is only one addition-only ledger. The integrity of the blockchain is ensured through the mining process. This fulfills a dual function:

  • Maintain the blockchain
  • Requiring the participant to provide and run a proof-of-work algorithm – helps generate new Bitcoins.
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A minor in a Bitcoin System fulfills the role of grouping new legitimate transactions that have been received through the peer-to-peer network into multiple blocks which include a set of transactions and a header which consists of a hash of the previous block and a nonce (any value that cannot be used once).

The miner will then calculate a SHA-256 hash value of the block. Once the binary representation of the hash value has an acceptable number of leading zeros, the miner distributes the newly mined blocks to other users through the peer-to-peer network, and each peer confirms the legitimacy of the new block compute the block’s SHA-256 hash value and confirm that it contains, at least, the appropriate number of leading zeros. This effectively verifies the transaction and protects them from tampering.

In addition, this new block consists of a special transaction – called the coinbase, which plays the role of an additional nonce – a comment field and a single transaction that pays all transaction fees and the block reward – initially it was 50 BTC and promises to continue to halve all four years – in the miner’s wallet.

However, what often happens is that choosing nonce often results in a SHA-256 hash value without a sufficient number of leading zeros. Then the miner follows this by repeating the process with a different nonce value until a particular miner finds a block with the appropriate hash value and shares it over the peer-to-peer network. Immediately after discovering a new block, all miners exclude the newly verified transaction from their working pool and continue with another set of transactions.

What makes mining competitive is its unpredictable nature and fixed block creation rate. The chances of a miner discovering a valid block are a function of both the number of SHA-256 calculations it can compute in a second – often measured in millions, billions, or trillion hashes per second – and the overall hash rate. of the Bitcoin network. On average, a desktop PC can perform between 2 and 10 million hashes per second (MH / s). On the other hand, a dedicated ASIC mining system can achieve 500 billion hashes per second (BH / s) or more.

Joint mining

At the time of this writing, a desktop computer mining at a speed of 10MH / s will mine for over 420 years before discovering a winning block. Indeed, mining becomes a lottery even with a supreme GPU capable of 500 to 1000 MH / s. However, there is a specific process by which miners overcome this difficulty.

They can join a mining pool, which effectively combines the mining power of a large number of individual miners but pays a relatively small amount for each unit of work done to mine a block. For a mining pool, the amount of reward each miner receives depends on their hash power.

Botnet exploitation

Botmasters’ ability to turn compute into money has given them a new way to monetize the unexplored computational capacity of their compromised hosts and the growing value of Bitcoin provides a strong incentive to do so.

The first Bitcoin mining malware was observed in the wild in June 2011. However, since then, several malware families have embarked on Bitcoin mining.

The first family identified with mining capability was NGRBot, a malware kit that has been available for many years. NGRBot is a generic malware platform with a lot of features, including personal data theft, auto-propagation over USB and network, and much more.

Final result

There are three distinct botnet mining pool structures: direct pool mining, proxy pool mining, and dark pool mining. Bitcoin mining plays the role of maintaining the transaction ledger that Bitcoin is based on and miners have become more sophisticated in recent years with a complex machine.


Interesting Related Article: “What Is Cryptocurrency?” “

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