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Questions tagged [mining-theory]

This tag should be used for questions about the function, the reason for, and the underlying concepts of mining.

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176
votes
8answers
107k views

What exactly is Mining?

I have heard that mining is for people with ready hardware and blah blah blah... But what exactly is it? Does it operate like real mining? I mean, people talk about it like you are physically mining.
64
votes
9answers
82k views

Where do bitcoins come from and what gives them their value?

Where do bitcoins come from? From the WeUseCoins.com video it appears they are just being produced by "miners" and sold to people. So who backs Bitcoin or gives it its value?
137
votes
4answers
227k views

What are bitcoin miners really solving?

As with mining, what are the bitcoin miners really solving? I read they are solving hashes, but what does that really mean. Can we see what they are solving? Can someone give an example of what a ...
118
votes
10answers
41k views

How much will transaction fees eventually be?

Some people keep evangelizing that Bitcoin transaction fees are much lower than in PayPal or with credit cards. However, once nearly all 21 million bitcoins have been mined, the network will still ...
52
votes
4answers
30k views

What keeps the average block time at 10 minutes?

I've been told "the network" sets the difficulty level such that there will be one new block mined every ten minutes. I imagine the rich would instead prefer to keep difficulty as high as possible to ...
109
votes
5answers
19k views

Why is 6 the number of confirms that is considered secure?

Why is 6 is the number of confirmations that is considered secure? I haven't found any mathematical explanation or otherwise that explains why it is 6 and not 5 or 7. Is there a historical reason for ...
6
votes
1answer
1k views

Why doesn't the same miner always win?

If the miner with the strongest ability to solve the block wins, why doesn't the same miner win every time? Wouldn't that miner still have the strongest ability to perform the proof of work on the ...
42
votes
2answers
14k views

What happens if two miners mine the next block at the same time?

The process of mining as described in the answer to this question is simultaneously repeated by multiple miners. Is it possible for two miners to find the next block at the same instant? If it is, ...
22
votes
3answers
3k views

What happens if there are no transactions in a block?

What happens if there are no transactions in a block? Suppose there is a 10 minute time frame in the middle of the night, maybe on a holiday, and there are no transactions made. Do the miners get ...
8
votes
3answers
3k views

How does the mining process support the currency?

Why is mining Bitcoins necessary? Is it essentially a distribution mechanism to ensure Bitcoins are not held by a few (wealthy) individuals from the get-go who might just hoard Bitcoins rather than be ...
44
votes
4answers
16k views

Why was the target block time chosen to be 10 minutes?

According to the wiki, 10 minutes was chosen as a 'tradeoff'. Why ten minutes specifically? It is a tradeoff chosen by Satoshi between propagation time of new blocks in large networks and the ...
18
votes
2answers
11k views

What is proof-of-work?

Please explain the proof-of-work concept. And how does it relate to Bitcoin mining in general, and to the proofs of work (aka shares) of mining pools?
11
votes
6answers
6k views

What is the rationale behind Bitcoin mining?

I don't understand the logic of "mining", if bitcoins are a digital currency, why do we need a GPU to "make 'em"?
5
votes
2answers
883 views

Creating empty blocks vs creating full blocks

I've already read many different answers to this topic. Is it correct that the miner decides on his own if he includes any transactions in his block and how many (as long as the block size is <...
21
votes
2answers
13k views

What does the term “Longest chain” mean?

What does the term "Longest chain" mean, as there is only one 'right' blockchain exists? How another longer chain would make the 'right' chain invalid?
17
votes
6answers
5k views

Why do we need Proof of Work in bitcoin?

I know that proof of work shows that the person has put in some time and power into the processing. I also know that bitcoin mining is adding a transaction into the blockchain and then the miner will ...
25
votes
1answer
14k views

When a block is “discovered” how is the nonce determined?

I know that a block is based on a random number called a nonce, but if that number is random and unknown to the miner, how is that number actually verified as the correct nonce and not some arbitrary ...
8
votes
1answer
2k views

Calculate hash of block header

I'm trying to calculate the hash of block #502871. This is the block: { "result": { "hash": "00000000000000000020cf2bdc6563fb25c424af588d5fb7223461e72715e4a9", "confirmations": 35, "...
6
votes
2answers
2k views

Can you mine without transactions?

As far as I know, mining means verifying transactions and thus keeping the Bitcoin network alive. Today, at a local meetup, some people have informed me that mining doesn't need transactions. They ...
28
votes
2answers
39k views

How does proof-of-stake “mining” work?

I know and understand the concept of proof-of-stake. Instead of requiring users to do a certain amount of power-intensive hashing "work", it requires you to own a certain stake of the currency in ...
18
votes
4answers
7k views

How can one embed custom data in block headers?

Some mining pool admins put custom data in block headers, like prayers. How do they do that? Where can I see that data for myself?
15
votes
3answers
1k views

What happens once mining speed gets close to zero?

According to Wikipedia The number of Bitcoins created per block is never more than 50 BTC, and the awards are programmed to decrease over time towards zero, such that no more than 21 million will ...
1
vote
2answers
222 views

How miners with less power win?

As I understand, when multiple persons mine blocks, only the first one who solves block is the winner and gets rewarded. Basically the winner is the one (solo miner or group in pool) who has the ...
22
votes
6answers
18k views

What happens to the bitcoin network when the miners all stop in the future?

What happens to the bitcoin network when the miners all stop, years in the future after all the bitcoins have been mined? How will the network continue to function? Won't bitcoins then be useless? ...
8
votes
4answers
17k views

Why is mining necessary for the Bitcoin network/system? [duplicate]

I understand that a transaction is a record of 1+ Bitcoins being given from one party to another. I understand that a block is a collection of unverified (pending) transactions that gets verified ...
13
votes
1answer
1k views

What is the approximate hashrate of a human?

Which and how much mathematical operations are required for the blockheader-to-blockhash operation and how fast would a human be able to calculate a single hash? EDIT: For simplicity, I think it's a ...
6
votes
1answer
4k views

How is a block header hash compared to the target (bits)?

I'm trying to wrap my head around the mining process by doing a small example of block hashing. According to the Wiki entry about difficulty, the target for a block hash can be read from the "bits" ...
4
votes
2answers
291 views

Why aren't block hashes used directly as scores for difficulty purposes?

Why does Bitcoin apply a difficulty function to block hashes and then use the output of this function to add up and determine the "longest" chain? Why not just e.g. add together all block hashes (as ...
25
votes
4answers
71k views

The bitcoin mining algorithm from a programmer's viewpoint

This page: Blocks said mining is actually to solve a mathematical problem, but reading Block hashing algorithm doesn't give much help. I also tried reading bitcoind source code, but reading code takes ...
30
votes
3answers
3k views

Are there algorithms that could have been chosen for mining that balance CPU/GPU?

The mining algorithm for Bitcoins (and most alternative but similar currencies as well) is purely computation hard, but not decision hard or memory hard. This caused the unexpected effect that GPUs ...
10
votes
3answers
782 views

Flaw in Bitcoin protocol regarding incentives to share transactions

Once the 50BTC per block rewards have halved many times and the transaction fees start to become the primary reward for miners, it sound like there is incentive for miners to not pass on transactions ...
7
votes
3answers
5k views

What Value does mining provide?

After reading the O'Reilly book and perusing online resources, I'm still confused about the value that the actual mathematical mining provides to Network (I understand it does provide value, but not ...
11
votes
1answer
2k views

Why do you need the *complete* blockchain to mine bitcoins, why not just the last n blocks?

I understand that to mine bitcoins you need the hash of the previous block, and in order to resolve possible forks. But why not just have the last 100 blocks (or more whatever is appropriate) and keep ...
8
votes
3answers
1k views

Do miners have both the incentive and ability to keep the reward at 50BTC?

There has been some concern about the fact that transaction fees (in their current form) are not an adequate replacement for the current 50BTC block reward. Gavin has said as much, as have others. ...
6
votes
1answer
666 views

Can a miner steal another one's block?

Say we have two miners, Alice (an honest miner), and Eve (an evil miner). My understanding is that when Alice mines a block she advertises it to the network, and once it's part of the longest block ...
5
votes
1answer
2k views

Why the timestamp component of the block header?

What is the reason for the timestamp field in the block header? Surely the nonce should be the only property that changes? Should the nonce reset to 0 everytime the timestamp changes?
3
votes
1answer
172 views

Can Undercutting attacks be Mitigated?

An Undercutting attack as described in this paper, is a mining strategy which involves producing new blocks not on the longest known chain, but instead 'undercutting' the longest chain by building a ...
0
votes
1answer
395 views

Does mining power of different miners add up in mining pools?

I have this doubt regarding bitcoin mining, assuming I have two miners of hashpower 500 H/s . Can I add up my hashpower and make it work like a single processor of 1000H/s OR Both both miners would ...
1
vote
3answers
773 views

Will ASIC miners hold the network “hostage” and demand a fee for their services?

I can see a trend coming where miners will likely hold the network "hostage" by mining blocks with no transactions in them... even when the block reward nears zero. This would leave transactions in ...
1
vote
1answer
178 views

Which elements of a block are hashed?

Other than the previous block hash and nonce data, which elements of a block are concatenated in order to be hashed?
37
votes
2answers
74k views

What is Gas Limit in Ethereum?

What is the function of Gas Limit parameter in Ethereum? Is it involved in mining or something else?
15
votes
8answers
3k views

Are there algorithms that could be used for mining that resist acceleration with ASICs?

In my related question about mining algorithms that balance CPU and GPU it came up that such an algorithm would tremendously increase the incentive for people to create mining botnets. The prospect of ...
13
votes
4answers
7k views

Why can't we design a bitcoin that does useful work? [duplicate]

The bitcoin network, including every miner, is the biggest computing project that humanity has created. Thus I ask: why, instead of using it to generate useless data, don't we use it to generate ...
21
votes
4answers
1k views

How often forks occur?

How often do forks occur in the block chain? I'm interested in the small, one block forks that happen when two miners create a block at the similar time.
10
votes
5answers
6k views

What features of scrypt() make Tenebrix GPU-resistant?

There's a fork of Bitcoin called Tenebrix that is claiming to be CPU-friendly and GPU-resistant (with regard to mining). They say that this is because they're using scrypt instead of SHA256. From what ...
5
votes
3answers
116k views

How many hashes create one Bitcoin?

Irrespective of the length of time required to calculate one hash, how many hash operations are required to produce one Bitcoin?
7
votes
2answers
2k views

How to prevent a miner from stealing another miner's block?

Many articles only contain a phrasing like A miner A solves the hash problem and gives the result to the network to check. Once a majority of the network confirms, A gets the reward. But how does ...
5
votes
2answers
3k views

Probablity Distribution of mining

What is the probability distribution of solving a block, given the same difficulty. So if I try to mine multiple times using the same difficulty, is it normal distribution with mean of 10 minutes? ...
15
votes
6answers
27k views

Why can't they use super computers to mine all the bitcoins?

I have very limited knowledge of bitcoin, but, I hope you don't mind my asking this question: As I understand it, "mining bitcoin" requires "significant" computational prowess. A lot of dedicated ...
15
votes
2answers
2k views

What happens if hash rate decreases rapidly?

Since difficulty is only adjusted every 2016 blocks, what would happen if hash rate was to decrease rapidly? Wouldn't this cause blocks to be created less frequently and also making the time until ...