What Does Bitcoin Mining Power Mean?

If you are mining Bitcoin, you do not need to calculate the total value of the 64-digit number (the hash). I repeat: You do not need to calculate the total value of a hash.

Remember 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 target hash. Miners create these guesses by randomly generating as many"nonces" as you can, as quickly 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 given credit for completing that block, and is awarded the spoils of 12.5 BTC. .

In theory you can Attain the Exact Same goal by rolling a 16-sided die 64 days to arrive at random numbers, but why on earth do you want to do this

The screenshot below, taken by the website Blockchain.info, might enable you to put all of this information together at a glance. You are looking at a summary of everything that 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 truly want to find all 1768 of those transactions for this block, go to this webpage and scroll down to the heading"Transactions." .

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

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

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

In other words, it is literally just a numbers game.  You cannot imagine 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 below the goal is 1 in 2,874,674,234,416--significantly less than 1 in 2 trillion. .

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The aforementioned site Cryptocompare delivers a helpful calculator that permits you to plug in numbers like your hash rate, power prices etc., to estimate the costs and benefits.

Mining rewards are paid into the miner who finds a solution to the puzzle first, and also the likelihood that a participant will be the one to find the solution is equal to the portion of the total mining energy on the network.  Participants which have a small percentage of the mining power stand a tiny chance of discovering the next block on their own.  For instance, a mining card that one could purchase to get a couple thousand dollars 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 problem going up makes things even worse.  The miner may never recover their investment.  The answer to this problem is mining pools.  Mining pools are run read 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 stream of bitcoin starting the afternoon they activate their miner.  Statistics on some of the mining pools can be seen on Blockchain.info. .

Sure. As discussed, the simplest 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 wise 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 utilized for Bitcoin mining. You can start looking into companies which make ASICs miners or GPU miners. .