David Schwartz's answer is entirely accurate, but all that "bitspeak" might be a little intimidating to the average user. Let me try and put it into more plain language:
The way Bitcoin works is that instead of having one central authority who secures and controls the money supply (like most governments do for their national currencies), this work is ...
Here is an extremely simplified sketch of the problem, but it should give a pretty good idea of what the problem is.
This is the hash of the lastest block (shortened to 30 characters):
These are the hashes of a few valid transactions waiting for inclusion (shortened).
And this the hash ...
mining is doing the work of finding nonce so that sha256(sha256(data+nonce)) < difficulty
nonce is an integer number the miner chooses freely (this choosing of the nonce and checking if the condition (< difficulty) is met comprises the work
data is a hash over the contents of the block (transactions) and the previous block's hash
sha256() is ...
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 ...
Mining is the process of securing transactions and committing them into the bitcoin public chain. It requires winning a kind of computational lottery where each hash you perform is like buying one ticket. The Bitcoin protocol currently permits the miner who generates a block to claim 50 bitcoins as well as any transaction fees for the transactions that miner ...
The Mining Algorithm is as follows:
Step 0 - Retrieve the hash of the previous block from the network.
Step 1 - Gather a list of potential transactions known as a "block". This list of transactions comes from the peer-to-peer bitcoin network.
Step 2 - Calculate a hash for a block of potential transactions along with a random number.
Step 3 - If the hash is ...
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 ...
I think the premise of the question is not correct. The work is not useless, it secures the transactions. The public hash chain ensures that Bitcoins can only be spent once. The mechanism piles computations on top of legitimate transactions so that the recipient knows that an attacker would need at least as much computing ability to "undo" the transaction.
In Nextcoin, proof of stake is used. So the "mining" process there is just about holding coins and leaving your computer on. It doesn't involve powerful CPUs.
Each block (every 60 seconds), a random Nextcoin is selected to be the next "miner". There are 1 billion coins so the odds of a single wallet being selected is the number of Nxt in that wallet ...
Proof of stake is a proposed alternative to proof of work designed to increase network security. It's not currently implemented in the main chain (and would likely require a hard fork to implement), but alt currency PPCoin features a hybrid proof-of-stake/proof-of-work system of sorts.
With proof of work, the likelihood of mining a block is dependent on the ...
The big advantage on the Bitcoin side is that its technology is now well-proven. Ripple's consensus system is the newcomer. Ripple was designed by people who had the benefit of seeing exactly what Bitcoin was doing and its strengths and weaknesses.
Ripple's consensus process can validate a transaction such that irreversibility is reasonably assured much ...
The specific reason that AMD cards are more efficient for Bitcoin mining is twofold and the answer to this question depends on both reasons:
AMD GPUs tend to have lower-end ALUs but make up for this by packing more ALUs onto the card overall. For most hash algorithms this is preferable.
AMD GPUs uses ALUs which can perform the 32-bit integer right rotate ...
Solving SHA256 hash problems on Bitcoin is useful in the sense that secures the Bitcoin blockchain, but if your question is: "why can't it do something computationally useful as a side-effect?", then I think the answer is "we don't know how". For Bitcoin to work, the proof-of-work that miners do must have the following properties:
Easy to verify solutions
NooShare is an idea for:
a decentralised ledger similar to Bitcoin with the novel feature that
its proofs of work are iterations of essentially arbitrary
Markov-Chain Monte-Carlo (MCMC) chains, the scheduling of which can be
purchased using the currency itself. It is a novel economic basis for
sharing fallow computational resources.
I don't know ...
Forget PoW for a second: lets instead imagine that you have a box, and you've placed a lock on it, in order to secure it's contents.
Now, if someone asks you how secure the contents are, then the size and type of lock is fairly important. Tying the box closed with a bit of string isn't very good security, at least compared to a heavy-duty padlock. For an ...
The scrypt() algorithm has at its core a routine called ROMmix. Basically, it defines
V(1) = hash(message)
V(2) = hash(hash(message))
V(3) = hash(hash(hash(message)))
and it calculates
Since computing V(n+1) requires computing V(n) first, the most efficient way to do this is to cache all of the previously-computed ...
The problem is that no one has come up with a proof-of-work system based on useful work that also:
Generates easily verifiable solutions
Can have the difficulty of finding a solution adjusted
For example, if the system were searching for prime numbers, the solutions would take a long time to verify as being prime. The difficulty of finding the next prime ...
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. ...
Bitcoin miners find a random number (called a "Nonce") that when inserted into the current block makes the hash be below the current target. They then send that current block around the network and everyone checks their work (the proof-of-work) by hashing the block and checking if the result is below the current target. In mining pools, miners do the same ...
Imagine I have 1 bitcoin. And imagine I can form a transaction to send that bitcoin to Alice or I can form a transaction to send that bitcoin to Charlie.
Now, what stops me from forming both transactions? Nothing.
So, if I do that, how will people know which transaction is valid? Clearly, without some reliable way to tell which of those two transactions ...
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 ...
The important thing here is, that every mining pool/solo miner is working on a different input: They have different coinbase transactions and are working on different sets of transactions. Further entropy can be added by changing the nonce and extra-nonce, by adding another transaction, or by changing the order of the transactions.
While there can be block ...
I don't know of any such list yet, but no reason we can't start making one. :) Others should feel free to add their findings via an edit.
Proof of Work
Proof of Stake
Proof of Activity
Proof of Storage
Proof of Knowledge
Proof of Stake Velocity
Proof of Burn
Dual Purpose Proof of Work (Primecoin)
Proof of Lock (Tendermint)
Delegated Proof of Stake (...
The simple answer: no.
The not to simple answer: extremely unlikely.
Miners hash an input block, in the hopes of getting a result that satisfies the difficulty requirement, i.e., has a certain number of zeroes in front. Now the possibilities for the miner to vary the input are quite large. There is the 4 byte nonce, there is the order transactions are put ...
For Peercoin specifically, PoW and PoS blocks are independent. Just as you're betting your consumed electricity and CPU-time vs. the possible PoW-blok's reward, in the PoS blocks you're betting your coin-age: the amount oF PPC you own multiplied by the number of days they've sitted idly at your wallet. It must be a minimum of 30 and a maximum of 90 days for ...
Well, I know of one altcoin that does useful work: Primecoin.
As Wikipedia describes it:
Primecoin (sign: Ψ; code: XPM) is a peer-to-peer open source cryptocurrency that implements a scientific computing proof-of-work system. Primecoin's proof-of-work system searches for chains of prime numbers.
Primecoin already has quite some world-record prime chains ...
Not that other answers are wrong here, but just to approach your confusion from another angle:
SHA256 hashing algorithm, which produces alphanumeric hashes.
That's not true. The hashing algorithm produces a stream of bytes. Only when you display that bunch of bytes on your screen it's common for it to be in hexadecimal (containing "alphanumeric" ...