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→‎See Also: * [https://jornc.github.io/bitcoin-transaction-explorer/ Mining Simulator] ([https://jornc.github.io/bitcoin-transaction-explorer/ GitHub source])
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<!-- This page is designed to be short and simple! It should provide only a very brief explanation of things that have their own page and should link to other pages whenever possible. This page should serve as an entry point and a place to organize most of our mining articles. Thank You! (-Atheros) -->
<!-- This page is designed to be short and simple! It should provide only a very brief explanation of things that have their own page and should link to other pages whenever possible. This page should serve as an entry point and a place to organize most of our mining articles. Thank You! (-Atheros) -->
[[File:Quick-and-dirty-4x5970-cooling.jpg|thumb|right|A quick and dirty mining rig]]
[[File:Quick-and-dirty-4x5970-cooling.jpg|thumb|right|A home-made "[[Mining rig|mining rig]]"]]
== Introduction ==
== Introduction ==
'''Mining''' is the process of adding transaction records to Bitcoin's public ledger of past transactions.
'''Mining''' is the process of adding transaction records to Bitcoin's public ledger of past transactions (and a "[[Mining rig|mining rig]]" is a colloquial metaphor for a single computer system that performs the necessary computations for "mining".
This ledger of past transactions is called the [[block chain]] as it is a chain of [[block|blocks]].
This ledger of past transactions is called the [[block chain]] as it is a chain of [[block|blocks]].
The block chain serves to [[Confirmation|confirm]] transactions to the rest of the network as having taken place.
The blockchain serves to [[Confirmation|confirm]] transactions to the rest of the network as having taken place.
Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.
Bitcoin nodes use the blockchain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.


Mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual [[blocks]] must contain a [[proof of work|proof of work]] to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the [[hashcash]] proof-of-work function.
Mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual [[blocks]] must contain a [[proof of work|proof of work]] to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the [[hashcash]] proof-of-work function.


The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus.
The primary purpose of mining is to set the history of [[transactions]] in a way that is [[Irreversible Transactions|computationally impractical to modify by any one entity]]. By downloading and verifying the blockchain, bitcoin [[full node|nodes]] are able to reach consensus about the ordering of events in bitcoin.
Mining is also the mechanism used to introduce Bitcoins into the system:
 
Miners are paid any transaction fees as well as a "subsidy" of newly created coins.
Mining is also the mechanism used to [[Controlled supply|introduce Bitcoins]] into the system:
Miners are paid any [[transaction fees]] as well as a "subsidy" of newly created coins.
This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.
This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.


Bitcoin mining is so called because it resembles the mining of other commodities:
Bitcoin mining is so called because it resembles the mining of other commodities:
it requires exertion and it slowly makes new currency available at a rate that resembles the rate at which commodities like gold are mined from the ground.
it requires exertion and it slowly makes new units available to anybody who wishes to take part. An important difference is that the [[Controlled supply|supply]] does not depend on the amount of mining. In general changing total miner hashpower does not change how many bitcoins are created over the long term.


== Difficulty ==
== Difficulty ==
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=== The Difficulty Metric ===
=== The Difficulty Metric ===
The [[Difficulty|difficulty]] is the measure of how difficult it is to find a new block compared to the easiest it can ever be. It is recalculated every 2016 blocks to a value such that the previous 2016 blocks would have been generated in exactly two weeks had everyone been mining at this difficulty. This will yield, on average, one block every ten minutes. As more miners join, the rate of block creation will go up. As the rate of block generation goes up, the difficulty rises to compensate which will push the rate of block creation back down. Any blocks released by malicious miners that do not meet the required difficulty [[Target|target]] will simply be rejected by everyone on the network and thus will be worthless.  
The [[Difficulty|difficulty]] is the measure of how difficult it is to find a new block compared to the easiest it can ever be. The rate is recalculated every 2,016 blocks to a value such that the previous 2,016 blocks would have been generated in exactly one fortnight (two weeks) had everyone been mining at this difficulty. This is expected yield, on average, one block every ten minutes.
 
As more miners join, the rate of block creation increases. As the rate of block generation increases, the difficulty rises to compensate, which has a balancing of effect due to reducing the rate of block-creation. Any blocks released by malicious miners that do not meet the required [[Target|difficulty target]] will simply be rejected by the other participants in the network.


=== Reward ===
=== Reward ===
When a block is discovered, the discoverer may award themselves a certain number of bitcoins, which is agreed-upon by everyone in the network. Currently this bounty is 25 bitcoins; this value will halve every 210,000 blocks. See [[Controlled Currency Supply]].
When a block is discovered, the discoverer may award themselves a certain number of bitcoins, which is agreed-upon by everyone in the network. Currently this bounty is 12.5 bitcoins; this value will halve every 210,000 blocks. See [[Controlled Currency Supply]].


Additionally, the miner is awarded the fees paid by users sending transactions. The fee is an incentive for the miner to include the transaction in their block. In the future, as the number of new bitcoins miners are allowed to create in each block dwindles, the fees will make up a much more important percentage of mining income.
Additionally, the miner is awarded the fees paid by users sending transactions. The fee is an incentive for the miner to include the transaction in their block. In the future, as the number of new bitcoins miners are allowed to create in each block dwindles, the fees will make up a much more important percentage of mining income.
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FPGA mining is a very efficient and fast way to mine, comparable to GPU mining and drastically outperforming CPU mining. FPGAs typically consume very small amounts of power with relatively high hash ratings, making them more viable and efficient than GPU mining. See [[Mining Hardware Comparison]] for FPGA hardware specifications and statistics.
FPGA mining is a very efficient and fast way to mine, comparable to GPU mining and drastically outperforming CPU mining. FPGAs typically consume very small amounts of power with relatively high hash ratings, making them more viable and efficient than GPU mining. See [[Mining Hardware Comparison]] for FPGA hardware specifications and statistics.
==== ASIC Mining ====
==== ASIC Mining ====
An application-specific integrated circuit, or ''ASIC'', is a microchip designed and manufactured for a very specific purpose. ASICs designed for Bitcoin mining were first released in 2013. For the amount of power they consume, they are vastly faster than all previous technologies and already have made GPU mining financially unwise in some countries and setups.
An application-specific integrated circuit, or ''ASIC'', is a microchip designed and manufactured for a very specific purpose. ASICs designed for Bitcoin mining were first released in 2013. For the amount of power they consume, they are vastly faster than all previous technologies and already have made GPU mining financially.


==== Mining services (Cloud mining) ====
==== Mining services (Cloud mining) ====
[[:Category:Mining_contractors|Mining contractors]] provide mining services with performance specified by contract, often referred to as a "Mining Contract". They may, for example, rent out a specific level of mining capacity for a set price for a specific duration.
[[:Category:Mining_contractors|Mining contractors]] provide mining services with performance specified by contract, often referred to as a "Mining Contract." They may, for example, rent out a specific level of mining capacity for a set price at a specific duration.


=== Pools ===
=== Pools ===
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=== History ===
=== History ===
Bitcoin's public ledger (the 'block chain') was started on January 3rd, 2009 at 18:15 UTC presumably by [[Satoshi Nakamoto]]. The first block is known as the [[genesis block]]. The first transaction recorded in the first block was a single transaction paying the reward of 50 new bitcoins to its creator.
Bitcoin's public ledger (the "block chain") was started on January 3rd, 2009 at 18:15 UTC presumably by [[Satoshi Nakamoto]]. The first block is known as the [[genesis block]]. The first transaction recorded in the first block was a single transaction paying the reward of 50 new bitcoins to its creator.


==See Also==
==See Also==


* [http://BitcoinMiner.net Comprehensive Guide Bitcoin Miner and Mining]
* [https://99bitcoins.com/beginners-guide-to-mining/ Beginner's Guide to Bitcoin Mining]
* [https://www.zpool.ca Bitcoin Multipool]
* [https://www.bitcoinmining.com Bitcoin Mining]
* [http://codinginmysleep.com/bitcoin-mining-in-plain-english Bitcoin Mining in Plain English] by David Perry
* [http://codinginmysleep.com/bitcoin-mining-in-plain-english Bitcoin Mining in Plain English] by David Perry
* [https://www.weusecoins.com/en/mining-guide/ Getting Started With Bitcoin Mining]
* [https://www.weusecoins.com/en/mining-guide/ Getting Started With Bitcoin Mining]
* [[Automatically mine when computer is locked|Tutorial to automatically start mining when you lock your computer]]. (Windows 7)
* [[Automatically mine when computer is locked|Tutorial to automatically start mining when you lock your computer]]. (Windows 7)
* [http://bitcoinminer.com Bitcoin Miner]
* [http://www.bitcongress.org/bitcoin/best-bitcoin-mining-hardware/ Bitcoin Mining Hardware Comparison]
* [http://www.reddit.com/r/Bitcoin/comments/18q2jx/eli5_bitcoin_mining_xpost_in_eli5/ Simplified Explanation of Bitcoin Mining] by reddit user [http://www.reddit.com/user/azotic azotic]
* [http://www.reddit.com/r/Bitcoin/comments/18q2jx/eli5_bitcoin_mining_xpost_in_eli5/ Simplified Explanation of Bitcoin Mining] by reddit user [http://www.reddit.com/user/azotic azotic]
* [https://www.bitcoinmining.com Bitcoin Mining]
* [https://bitcoinchain.com/pools Bitcoin Mining Pools Comparison]
* [http://www.bitcoinmining.com/best-bitcoin-cloud-mining-contract-reviews/ Research, Review and Compare Cloud Mining Contracts]
* [https://www.youtube.com/watch?v=GmOzih6I1zs Video: What is Bitcoin Mining?]  
* [https://www.youtube.com/watch?v=GmOzih6I1zs Video: What is Bitcoin Mining?]  
* [http://www.vnbitcoin.org/bitcoincalculator.php Bitcoin Mining Calculator]
* [http://yogh.io/#mine:last Mining Simulator] ([https://github.com/JornC/bitcoin-transaction-explorer GitHub source])
* [http://www.bitcoinmining.com/best-bitcoin-cloud-mining-contract-reviews/ Research, Review and Compare Cloud Mining Contracts]
* [http://bitcoindaily.org/bitcoin-guides/what-is-bitcoin-mining/ Bitcoin Mining Explained]
* [https://jornc.github.io/bitcoin-transaction-explorer/ Mining Simulator] ([https://jornc.github.io/bitcoin-transaction-explorer/ GitHub source])
[[ru:Mining]]
[[ru:Mining]]
[[Category:Mining]][[Category:Vocabulary]]
[[Category:Mining]][[Category:Vocabulary]]

Revision as of 21:48, 25 June 2018

A home-made "mining rig"

Introduction

Mining is the process of adding transaction records to Bitcoin's public ledger of past transactions (and a "mining rig" is a colloquial metaphor for a single computer system that performs the necessary computations for "mining". This ledger of past transactions is called the block chain as it is a chain of blocks. The blockchain serves to confirm transactions to the rest of the network as having taken place. Bitcoin nodes use the blockchain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.

Mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual blocks must contain a proof of work to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the hashcash proof-of-work function.

The primary purpose of mining is to set the history of transactions in a way that is computationally impractical to modify by any one entity. By downloading and verifying the blockchain, bitcoin nodes are able to reach consensus about the ordering of events in bitcoin.

Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a "subsidy" of newly created coins. This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.

Bitcoin mining is so called because it resembles the mining of other commodities: it requires exertion and it slowly makes new units available to anybody who wishes to take part. An important difference is that the supply does not depend on the amount of mining. In general changing total miner hashpower does not change how many bitcoins are created over the long term.

Difficulty

The Computationally-Difficult Problem

Mining a block is difficult because the SHA-256 hash of a block's header must be lower than or equal to the target in order for the block to be accepted by the network. This problem can be simplified for explanation purposes: The hash of a block must start with a certain number of zeros. The probability of calculating a hash that starts with many zeros is very low, therefore many attempts must be made. In order to generate a new hash each round, a nonce is incremented. See Proof of work for more information.

The Difficulty Metric

The difficulty is the measure of how difficult it is to find a new block compared to the easiest it can ever be. The rate is recalculated every 2,016 blocks to a value such that the previous 2,016 blocks would have been generated in exactly one fortnight (two weeks) had everyone been mining at this difficulty. This is expected yield, on average, one block every ten minutes.

As more miners join, the rate of block creation increases. As the rate of block generation increases, the difficulty rises to compensate, which has a balancing of effect due to reducing the rate of block-creation. Any blocks released by malicious miners that do not meet the required difficulty target will simply be rejected by the other participants in the network.

Reward

When a block is discovered, the discoverer may award themselves a certain number of bitcoins, which is agreed-upon by everyone in the network. Currently this bounty is 12.5 bitcoins; this value will halve every 210,000 blocks. See Controlled Currency Supply.

Additionally, the miner is awarded the fees paid by users sending transactions. The fee is an incentive for the miner to include the transaction in their block. In the future, as the number of new bitcoins miners are allowed to create in each block dwindles, the fees will make up a much more important percentage of mining income.

The mining ecosystem

Hardware

FPGA Module

Users have used various types of hardware over time to mine blocks. Hardware specifications and performance statistics are detailed on the Mining Hardware Comparison page.

CPU Mining

Early Bitcoin client versions allowed users to use their CPUs to mine. The advent of GPU mining made CPU mining financially unwise as the hashrate of the network grew to such a degree that the amount of bitcoins produced by CPU mining became lower than the cost of power to operate a CPU. The option was therefore removed from the core Bitcoin client's user interface.

GPU Mining

GPU Mining is drastically faster and more efficient than CPU mining. See the main article: Why a GPU mines faster than a CPU. A variety of popular mining rigs have been documented.

FPGA Mining

FPGA mining is a very efficient and fast way to mine, comparable to GPU mining and drastically outperforming CPU mining. FPGAs typically consume very small amounts of power with relatively high hash ratings, making them more viable and efficient than GPU mining. See Mining Hardware Comparison for FPGA hardware specifications and statistics.

ASIC Mining

An application-specific integrated circuit, or ASIC, is a microchip designed and manufactured for a very specific purpose. ASICs designed for Bitcoin mining were first released in 2013. For the amount of power they consume, they are vastly faster than all previous technologies and already have made GPU mining financially.

Mining services (Cloud mining)

Mining contractors provide mining services with performance specified by contract, often referred to as a "Mining Contract." They may, for example, rent out a specific level of mining capacity for a set price at a specific duration.

Pools

As more and more miners competed for the limited supply of blocks, individuals found that they were working for months without finding a block and receiving any reward for their mining efforts. This made mining something of a gamble. To address the variance in their income miners started organizing themselves into pools so that they could share rewards more evenly. See Pooled mining and Comparison of mining pools.

History

Bitcoin's public ledger (the "block chain") was started on January 3rd, 2009 at 18:15 UTC presumably by Satoshi Nakamoto. The first block is known as the genesis block. The first transaction recorded in the first block was a single transaction paying the reward of 50 new bitcoins to its creator.

See Also