# Tag Info

152

Here is an extremely simplified sketch of the problem, but it should give a pretty good idea of what the problem is. The data: This is the hash of the lastest block (shortened to 30 characters): 00000000000001adf44c7d69767585 These are the hashes of a few valid transactions waiting for inclusion (shortened). 5572eca4dd4 db7d0c0b845 And this the hash ...

68

The following is a description of the global, statistical gamble which is played every 10 or so minutes. The interval of the game is controlled by the difficulty which says how many "hashes" are needed per interval. In other words, the difficulty and target define the "odds of the house" against your chance of getting a winning SHA hash. The nonce is the ...

43

They try to find a random nonce (a little random data) that goes into a block and makes the block have a (SHA256) hash that (in binary) starts with a certain amount of 0's. The more zeroes the more rare hash is. A good hash' outcome is not predictable, and so you have to try a lot of times to find a good nonce. The amount of zeroes are based on how ...

28

Basically there are five main ways of getting bitcoins: Mining Buying Offering goods and services for Bitcoin Obtaining for free through micro payment Asking a friend who already has them to give a tiny fraction for free Let's start with mining: first of all I have to warn that currently there is almost impossible to mine by your own. You need to have a ...

18

At the beginning of Bitcoin, every newly mined block (about every 10 minutes) creates 50 bitcoins. This is called the block subsidy. About every 4 years, this number cuts in half. Therefore, the peak extraction rate was about the first 4 years of Bitcoin's existence. In fact, it was from 3 January 2009 to 28 November 2012. The block reward includes both the ...

18

According to comments by the project's founder, Bitcoin's issuance rate was indeed inspired by that of precious metals. However, it is implemented algorithmically, of course, which artificially limits the issuance rate rather than actually being an abundant resource getting consumed over time. The bitcoin reward schedule halves the block subsidy every 210,...

17

Mining is not essential for coin creation. New coin introduction can be tied to new block creation, or be time based. Even if you don't use proof of work, you will still have blocks (even if you don't call them that way anymore; they may be called "database updates"). More interesting however, if you don't use proof of work, you don't even need your own ...

13

Mining provides a way to reach consensus on what the transaction ledger should look like and know that nobody is cheating. That's the non-technical definition of mining. What exactly is Mining? The "authority" for double spending is the blockchain. The blockchain consists of the history of all blocks in the blockchain plus the next block of transactions. ...

12

It is exactly at block 420000. When block 420000 will be mined is not certain, as the block mining process is random and influenced by hashrate variation.

11

As you mentioned, bringing coins into the network is one of the main purposes of mining. But this reward is just an incentive to do the other more important part of mining: 'processing' transactions. Immutability As detailed here, when a block has been solved, not a single bit can be changed without invalidating it. This means that all of the ...

11

how is the output of a coinbase transaction (plus block's transaction fees) different than the outputs of any other transaction? Because it's validity is tied to WHICH block it is included in. You can't take a coinbase transaction and include it as if it were a standard transaction in another block, because it creates more bitcoins than it spends, which is ...

10

Because the block halving incentives getting into Bitcoin NOW, rather than later. Early birds take more risks and get more rewards. Otherwise the network would have problems getting enough miners involved in the first place. Asides that, there is a concept of inflation and deflation - we have already experienced the first one, so we might as well try the ...

10

No, mining will not come to an end at that point. The article is incorrect. Mining will continue once the block rewards are no longer available, as transaction fees will continue to be offered. As the block rewards tend towards zero, the total value of transaction fees in each block will start to exceed the block reward. This will happen long before the ...

10

These charts show the approximate network hash rate on the left axis: http://bitcoin.sipa.be/ We know the network adjusts for 25 new bitcoins per 10 minutes. Together this provides enough info to give an approximate answer to your question: hashes per bitcoin = (network hash rate) / (25 BTC per 10 minutes) = (180 * Th / s) / (25 * BTC / (600 * s) ) = ...

10

Immature coins are coins that were created in a block reward and haven't aged sufficiently, yet. The problem with block rewards is that they could still disappear again, if the generating block ends up being invalidated by a competing block chain. In order to minimize the confusion and subsequent problems from someone spending coins that end up disappearing ...

10

the protocol allows a miner when he creates a block to send himself 25 BTC which do not have a proper source (input). that's how those 25 BTC are created, they're bitcoins that come from nowhere.

9

Technically, yes it's possible to do this. Practically, doing this would probably break everyone's trust in Bitcoin. One of Bitcoin's principle guarantees is that nobody can confiscate anyone else's bitcoins through the Bitcoin protocol. This protects all of us, but it also means that we're each responsible for keeping our private keys secure. If we fail ...

9

The answer is constantly changing, but this is something you can calculate yourself. Look up the current Bitcoin difficulty value. Right now it is 460,769,358,091. Let's use scientific notation: 4.6e11. The difficulty determines the average number of hashes needed to mine one block. A minimum difficulty of 1 corresponds to 2^32 = 4.3e9 hashes, so we need ...

8

I've read some of the linked discussions, and it seems some of the participants fail to understand the basic economic theory of the marginal cost. In any high fixed-capital business, the net present value (NPV) determines the ROI (IRR) and determines the opportunity cost where investors apply their capital. Thus, in normal functioning markets, the lowest ...

8

David has already given a good explanation of the term coinbase, but I'd like to give further details on the coinbase transaction. The coinbase transaction is a special type of transaction. Every block must have a coinbase transaction, other transactions are optional. The coinbase transaction must be the first transaction of the block (it follows that ...

8

Blocks can include transactions, but it is not necessary for transactions to occur in order to create blocks. The only transaction that is required in a block is the coinbase transaction which is the transaction that creates new bitcoins and collects the transaction fees. This transaction is created by each miner individually for their block attempts (as it ...

8

A coinbase transaction it not spendable until it is 100 blocks deep in the blockchain. Since a block is produced every 10 minutes, it will typically take 1,000 minutes (just under 17 hours) before a miner can spend the reward. 1). Does the miner get rewarded once 51% nodes accept the block? If so, how is that acceptance information propagated to his/her ...

8

A block may contain only one transaction: the coinbase transaction. However, the time it takes to mine a block is not affected by the number of transactions in that block, so mining blocks with fewer transactions does not benefit the miner. On the other hand, miners collect fees from the transactions they include in a block, so by including more transactions ...

7

All times approximate. Each block takes ten minutes, so there are six blocks per hour, 24 hours per day. The original block reward was 50 BTC. Thus, 7200 BTC per day introduced to the system. I contrived this script to model the decline, including the year the halving is expected to occur: ruby -e 'reward = 7200.0; halving = 0; while halving < 33 do ...

7

Colin's calculation has a mistake in that it doesn't account for partial Bitcoins not being paid out in block rewards. It rounds down the reward per day, but should round each block reward down to the satoshi. The first period changed by this correction is Halving 10. Payout per day at 144 blocks Start (2009) : 7200.00000000 Halving 1 (2013) : 3600....

7

This rule is to prevent people from unintentionally spending Bitcoins that they wind up not owning. For any Bitcoins other than the block reward, unless you intentionally double spend, a reorganization leaves your transactions valid. So they can just be included in the new blocks. (Assuming they don't spend the proceeds of a double spend.) However, if ...

7

bitcoind is what is most widely used. And here is the source: https://github.com/bitcoin/bitcoin/ But there's various other implementations for clients such as BitcoinJ for Java https://code.google.com/p/bitcoinj/ or http://libbitcoin.dyne.org/ for C++. However, for miners the story is a bit different. If you're a miner you kind of need to use bitcoind. ...

7

Yes - it's feasible. Bitcoins are released at a constant rate determined by the protocol. At the time, 50 Bitcoins were being generated for every block(this is now 25); and blocks are supposed to be found every 10 minutes. Miners compete amongst each other for this prize. In 2009, you could mine using your computer's CPU and you were only competing with ...

7

The first block with the halved block subsidy is 420,000. However, blocks are discovered in a random process – whereas the protocol aims to have blocks found approximately every ten minutes, in effect blocks are currently found about every 8.94 minutes. Therefore, one can only estimate the precise arrival of the Halving: thehalvening.com estimates 2016-07-...

7

There is no treasury. The Bitcoin is generated out of nothing. The coinbase transaction has special rules. It is allowed to have only one input which has no previous output and really no value. It is allowed to create outputs which have a total value of the block subsidy (currently 12.5 BTC) plus the transaction fees from that block. Those coins aren't ...

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