Category: 3. Role does a Bitcoin Miner play

A better approach might be to use a service that hosts a mining rig for you. You pay for the machine and the electricity but everything else is taken care of. You can see your ROI via a dashboard and even work out a breakeven point. Here is an example from Compass Mining. Summarising the…

Choosing a mining pool comes down to some simple logic: the larger the size of the pool, in terms of hashpower, the more regularly they’ll find blocks. This will ensure a consistent stream of revenue. However, due to the small portion of the hashpower you will supply to the pool, your share of the coinbase…

If you’ve read this far and are excited at the process of running a mining rig, it’s time for a dose of cold reality. Bitcoin Mining is now a professional enterprise with most of the world’s bitcoin mining centres situated close to renewable energy sources in regions where electricity is cheap and plentiful. Professional miners…

The computational puzzle is in the form of a hashing algorithm called SHA256. This isn’t unique to Bitcoin, but is an external cryptographic standard, developed by the NSA. A hash is a unique one-way identifier for a digital record that enables privacy and security. Think of it as a randomising engine. You provide any input,…

Given that Bitcoin’s value comes from the digital scarcity of its currency, and the way it ensures against double spend, the mining process has to be difficult and incentivise honest behaviour. This is achieved through something called Proof of Work (Pow). PoW requires Miners to compete against each other to earn the right to broadcast…

As the Bitcoin blockchain has a fixed block size of 1MB, it can only accommodate an average of seven transactions per second, so unconfirmed transactions sit in something called a Mempool, waiting for Miners to take over. Miners’ function is to watch the Mempool, waiting for these unconfirmed transactions, then package them into a candidate…

What you’ll learn How Miners confirm bitcoin transactions What Proof of Work means Can anyone be a Bitcoin Miner? Introduction to Bitcoin Mining Pools In order to provide a functioning monetary system, without a central mediator, Bitcoin needs to settle transactions with ‘finality’. There can be no rolling back, or replaying transactions.  Full Nodes –…