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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196
votes
8answers
114k 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.
66
votes
9answers
92k 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?
160
votes
5answers
273k 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 ...
57
votes
4answers
32k 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 ...
128
votes
10answers
45k 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 ...
114
votes
5answers
21k 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 ...
9
votes
2answers
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 ...
49
votes
2answers
22k 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, ...
24
votes
3answers
5k 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 ...
19
votes
6answers
9k 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 ...
6
votes
2answers
1k 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 <...
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 ...
50
votes
5answers
27k 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 amount ...
26
votes
2answers
15k 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?
19
votes
3answers
12k 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"?
25
votes
1answer
15k 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 ...
9
votes
1answer
3k 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 ...
31
votes
3answers
44k views

How does proof-of-stake "mining" work? [closed]

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 ...
20
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4answers
8k 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?
18
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5answers
2k views

How do you create a planet-specific cryptocurrency that will ignore longer block chains from other planets?

I'm sure that cryptocurrencies will play a huge part of the economy across the solar system, when we have colonized many different planets, moons, and asteroids. But there are problems with using a ...
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 ...
7
votes
1answer
5k 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" ...
6
votes
1answer
934 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 ...
2
votes
2answers
271 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 ...
26
votes
6answers
34k 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
18k 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 ...
8
votes
2answers
3k 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 ...
13
votes
1answer
2k 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
4answers
1k views

What is the problem that mining solves?

Of course, the function of mining is to secure the blockchain, but I'm looking for a more abstract summary of what the exact problem is that mining tries to solve? I believe its called the Byzantine ...
6
votes
2answers
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?
4
votes
2answers
1k views

Which block header fields are miners able to change in an effort to avoid having to recalculate the Merkle Root?

In addition to the nonce and the Merkle Root, there are 4 other fields in the header - version, previous header hash, time and nbits. Assuming a miner does not want to change the merkle root because ...
6
votes
2answers
336 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 ...
5
votes
4answers
328 views

Is it possible to use bitcoin as interplanetary money/store of value?

Let's say humans have finally made a successful colony on Mars, how useful would bitcoin be to transfer value between Earth and Mars? And if it won't work with the current implementation, what would ...
2
votes
2answers
203 views

Incentive for validating block

When miners find a solution to a block and broadcast it, what is the incentive for the other miners to actually validate that it is correct? It seems that they might save time by just starting to work ...
0
votes
2answers
230 views

What is the probability of mining a block by a miner controlling a fraction of hashing power?

Suppose a miner controls α fraction of the hashing power and the chain on which he is trying to mine has the mining rate given by f. How to find the probability of mining a block by the miner?
26
votes
3answers
81k 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 ...
11
votes
3answers
820 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
6k 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
3k 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 ...
9
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
2answers
519 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 ...
6
votes
2answers
2k views

What is preventing me from simply constructing a hash that's lower than the current target?

I just started learning about Bitcoin, and something I can figure out is why miners have to use a random process (hashing a nonce) to get lower than the target. For example, if the target is ...
4
votes
2answers
632 views

Why does the mined block differ so much from the block template?

I am looking at the specific block at height 680175. At the time when the block was not mined yet, I received the block template via bitcoin-cli getblocktemplate '{"rules": ["segwit&...
0
votes
1answer
424 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 ...
9
votes
3answers
1k views

Does mining a block force others to restart their work?

Does mining a block mean that anyone else who was working on mining a block loses their progress and must restart?
5
votes
1answer
658 views

How does mining process takes Approximately 10 minutes?

I don't think that I fully understood the "difficulty" topic in blockchain, and therefore I don't understand how mining process takes close to 10 minutes. If I have "Target" value (some hash value, ...
3
votes
3answers
801 views

Why is Bitcoin not moving to an ASIC-resistant Proof of Work algorithm?

Bitcoin uses a Proof of Work algorithm that makes it the perfect victim of ASIC mining. As a result, hash power is not very decentralized (more than 50% of Bitcoin's hash power is concentrated in ...