How does mining work?

Cryptocurrency mining is similar to searching for buried treasure. Miners collect transactions and arrange them into a block. Every block requires a unique number known as a nonce. Miners keep trying different nonces until they discover one that works, much as they would try different keys to access a locked door. This method requires a great deal of trial and error. When they locate the correct nonce, they have successfully mined a block that will be added to the blockchain, the official record of transactions. Miners are rewarded with fresh cryptocurrency for their efforts.

Bitcoin Target History

In simple terms, the Bitcoin mining goal is adjusted every two weeks or so to maintain a consistent rate of block production. If blocks are mined too rapidly, the target becomes more difficult, whereas mining them too slowly makes the target easier. This leads to a steady flow of around 10 minutes for each block, guaranteeing that new bitcoins are produced at a predictable rate over time. As more individuals mine Bitcoin and add computer power to the network, the objective adapts to keep the system functioning properly.

CPU vs GPU vs ASCI

CPU (Central Processing Unit): Consider it an ordinary computer chip that can do a variety of jobs. In the blockchain world, CPUs are similar to the fundamental processors found in most computers. They can handle almost anything linked to blockchain, although they aren't the quickest at some operations like mining.

GPU (Graphics Processing Unit): Consider a high-powered machine that excels at performing one thing at a time and can do it quickly. In the blockchain environment, GPUs are similar to those machines but are meant for jobs such as cryptocurrency mining. They aren't as adaptable as CPUs, but they excel at certain tasks.

ASIC (Application Specific Integrated Circuit): Consider a powerful machine designed just for one task and capable of exceeding all others. In the blockchain world, ASICs are similar to those machines, except they are particularly designed for cryptocurrency mining. They are extremely quick and efficient at this work, but they are limited in other areas.

Mining Pool

Imagine you and your friends searching for coins scattered over a large park. Some of my friends have more advanced metal detectors than others. Instead of searching alone, you choose teamwork. Everyone shares their discoveries, and when someone discovers coins, you divide them based on who assisted the most.This teamwork increases the probability that everyone will locate coins regularly, even if some people have stronger detectors. It's similar to working together to discover treasure and dividing the profits evenly. This is how a mining pool operates in Bitcoin mining.

Nonce Range

The nonce range is the set of possible values that can be assigned to the nonce throughout the blockchain mining process. The nonce is a 32-bit (or greater) integer that miners modify in their block headers when trying to discover a hash value that fits a specific criteria or objective.

In simple terms, the nonce range is a collection of numbers that miners may experiment with, similar to selecting numbers inside a certain range when playing a game. The wider the variety of nonces accessible, the more combinations miners may explore, which could increase their chances of discovering an authentic hash and successfully mining a block.

So what do the miners do when all the nonce get exhausted and they have not hit the target?

In simple terms, when miners try all possible nonce values without finding the right one, they don't give up. Instead, they make small changes to other parts of the block and try again. It's like trying different combinations of numbers and also changing the color or shape of the box you're looking for until you find the right one. Miners may also team up with others in mining pools to combine their efforts and increase their chances of success.

Timestamp

A timestamp in the context of blockchain refers to the date and time of a certain occurrence or activity inside the blockchain network.It acts as a digital clock that records when anything occurs on the blockchain. This timestamp assists in the organization and ordering of transactions and blocks, ensuring that they are placed sequentially.

For example, when a transaction is completed, it generates a timestamp that indicates the precise time it occurred. This contributes to the consistency and sequence of events on the blockchain, making it easier to follow and verify transactions.

What should miners do in idle time? Should they wait for the timestamp to change? During idle times, miners alter block settings, watch the network, optimize their setups, and may join mining pools to maximize efficiency and success.