Mining Process: An Overview


How can you mine bitcoins? When creating a block of transactions, Bitcoin miners initiate a process that confirms its accuracy. They apply a mathematical formula to this block, significantly shortening the original sequence. The result is a more concise sequence of letters and numbers, also called a “hash”.

Each new block is produced using the hash of the block in front of it. This is one way to confirm the accuracy of a block. This process creates a “wax seal” that validates the accuracy of both the new block and the block in front of it. Suppose you decide to break the integrity of a block. In this case, everyone will immediately know about it, and the block will be marked as fake.

Below is a brief description of the mining process.

  • The transaction is packed into a block.
  • Miners verify the transaction.
  • They pick the title of the most recent block and insert it into the new block as a hash.
  • Then they solve a math problem.
  • After finding a solution, a new block is added to the blockchain and then propagated throughout the network.
  • Miners are not trying to verify just one transaction – they are working to verify many transactions. All transactions are locked in boxes using a virtual lock. Miners use software to find the “key” that opens this lock. The box is opened after the computer picks up this key, the transaction is verified, and the miner receives 12.5 bitcoins.

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Bitcoin Mining: What You Need

Bitcoin mining with CPU / GPU. At the very beginning of mining history, miners used the CPU at mining farm to mine bitcoins. At the time, basic desktop computers were powerful enough to perform the required tasks. However, later it became more difficult to crack codes, and miners found a more efficient alternative: GPU mining on graphics cards.

Mining Bitcoin with FPGA

The User Programmable Logic Array (FPGA) allows mining hardware manufacturers to purchase as many chips as needed and configure them to mine Bitcoin before installing them back on the hardware. Since the hardware is customized specifically for Bitcoin mining, it usually performs better than CPU and GPU based hardware.

Bitcoin mining with ASIC

Specialized Integrated Circuits (ASICs) are the new word in bitcoin mining. They are designed to provide mining power at blazing speed and consume little electricity – a bonus for miners who have to pay large electricity bills, which reduces their income.

However, these microcircuits must be designed for specific tasks, which requires a lot of time and money to manufacture them. Yet many bitcoin miners believe this is a worthy investment in increasing speed. In fact, ASIC-based devices can operate at speeds up to 2 terahashes / sec.

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