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I've been diving into the world of Blockchain and crypto lately, trying to build my understanding of mining specifically. I understand that in POW systems, the difficulty of the first block is 1, and the current difficulty can be seen as being "current difficulty multiples harder than the first block" to mine (aka it scales linearly).

What I've been having a hard time figuring out, though, is how the designers of POW systems settled on the maximum target for their first blocks. To quote another stackoverflow answer:

Satoshi decided to use 0x1d00ffff as a difficulty for the genesis block, so the target was 0x00ffff0000000000000000000000000000000000000000000000000000.

This leaves me with a few questions:

  1. Is there a reason to why Satoshi picked this number specifically?
  2. How does this relate to other cryptos?
  3. Is the max target fairly arbitrary so long as the designer is careful not to pick a max target that's too low?
  4. (3b) If so, does the max target not matter in the same way after the first re-target (i.e., after the first 2016 blocks in bitcoin's case)?

My reasoning for asking this question is because when I look at the difficulty charts for cryptocurrencies, I've been curious if they're relatable to one-another, that is, if you could reason that because BTC has a difficulty of X and LTC has a difficulty of Y, you could determine which to mine based on difficulty and block reward alone.

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It's important to note that "difficulty" as such doesn't actually exist in the system; it's just a convenient way of representing the target value for human consumption. Internally (and on-chain) only the "target" and "nbits" representation are used.

Furthermore, the actual difficulty for the genesis block doesn't really matter, except for the fact that at least in Bitcoin it also happens to be the maximum permitted target value. And that value is relevant.

  1. We don't know how or why Satoshi picked the specific value of 65535×2208 as maximum target. But perhaps they measured the speed of mining on their own system/implementation, and chose a nice round number (in nbits representation) corresponding to what they estimated would be reasonable for the operational network.

  2. Not sure what you mean. Questions about specific altcoins are off-topic here.

  3. Yes, probably.

  4. Well, in Bitcoin the genesis's difficulty is also the minimum difficulty a block can have, and early on in Bitcoin's history, there were many retarget periods where the difficulty was just 1, because the hashrate wasn't sufficient for a higher difficulty.

My reasoning for asking this question is because when I look at the difficulty charts for cryptocurrencies, I've been curious if they're relatable to one-another, that is, if you could reason that because BTC has a difficulty of X and LTC has a difficulty of Y, you could determine which to mine based on difficulty and block reward alone.

You cannot compare hashrate of unrelated proof-of-work functions. They require separately-designed hardware, so one cannot be converted into another once you get out of the realm of general purpose (CPU & GPU) hardware.

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  • Regarding 4., it may be worth mentioning that the slightly higher minimum effort may have been picked to slow down initial supply distribution.
    – Murch
    Apr 12 at 15:13

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