Complete Explanation About Bitcoin Mining - Miner Role And Function - Hardware - Energy Consumption - Pool Mining

Complete Explanation of Bitcoin Mining. Bitcoin is heavily dependent on this mining process. Because with mining done by miners Bitcoin (miner) will validate every transaction, build and store the new block into blockchain. To save the new blocks into the Blockchain, miners must reach consensus.

Many people assume that all activities looking for Bitcoin are mining Bitcoin. Like looking for Free Bitcoin via faucet, giveaway, play game gets free Bitcoin, post can bitcoin, considered mine. Hopefully with this explanation it can give meaning "mined Bitcoin" real.

In the discussion "Complete Exploration Mining Bitcoin" will be discussed in full, and is divided into 5 parts:

1. The Role And Function Of Miner
2. Hardware Mining Bitcoin
3. Energy Consumption and Mining Ecology Bitcoin
4. Understanding Mining Pool

1. Role and Function of Miner (Miner)

Bitcoin Mining is actually a mine activity using a particular device. The process through solving a series of mathematical problems (puzzles) based on certain difficulty levels. Well this activity is called "Mining" or cool term is "Bitcoin Mining".

So clearly, that if someone is mining Bitcoin, that means the person is using a mining device. Can use CPU, GPU, FPGA, and ASIC. An explanation of this device will be discussed in the next section.

Mining actors, referred to as "miners", or the cool language is "Miner". Well, sometimes, we also still leave the question, what exactly is this miner Bitcoin doing?

Let's discuss it. Bitcoin mining process is similar to mining of precious metals such as gold. It's just the difference, if Bitcoin mining is done digitally to solve the puzzle, and gold mining through gold mining process.

Being similar, because sometimes there are miners who feel loss, because it can not and difficult to find gold, and some are successful. However, the real picture is, there will be many difficulties when doing the mining process.

Likewise with Bitcoin mining. There are a series of difficulties and challenges faced. As for being a miner, then we must be connected into the Bitcoin network. Once connected, then we will be a "node". The term node describes all devices connected to the Bitcoin network.

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2. Hardware Mining

As mentioned earlier, that to do Bitcoin mining, it takes a hardware to do calculations or computations in solving puzzles. Along with the development of the era, and the increasing difficulty level, the computing power also increasingly supported also with the development of this hardware.

Calculation in mining using SHA-256 hash function. This SHA stands for Secure Hash Algorithm. At the time Bitcoin was created by Satoshi Nakamoto, choosing to use SHA-256, of course because the best hash function that can be used at that time is SHA-256.

SHA-256 is a family in SHA-2. There are some similar ones in SHA-2 as in SHA-224, SHA-384, and SHA-512. While at SHA-256 there are 256 bits. Each function can operate on 32 bit words. So it can accommodate 32 bit hardware. This 256 number comes from 256 bit state and output. In the next development, has appeared SHA-3 family. But still not used in Bitcoin.

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3. Energy Consumption and Mining Ecology Bitcoin

The emergence of a large mining center professionally makes the mining dominance of Bitcoin. It seems exactly the same as gold mining. Especially, how is the role of large companies in gold mining that has caused much damage to the environment.

While in Bitcoin, it probably will not be that big as the impact. However, Bitcoin mining also requires enormous energy. Indirectly, it will also affect the currency, as well as the environment.

There is a law of physics known as Landauer's principle, by Ralph Landauer in 1960. In the laws of physics it states that any non-reversible computation would require a minimum amount of energy. Logically, any irreversible computing is considered to be a loss of information. Especially, in the principle of the laws of physics, states that every bit will consume at least (kT In 2) joules. Where K is a Boltzmann constant, or approximately 1.38 × 10-23 J / K. There, T is the temperature of the circuit in Kelvin size, and In 2 is the usual algorithm of 2, or approximately 0.69. This small sum is the amount of energy per bit. From this law of physics, explaining that a computation, will require energy that can be calculated per bit.

While SHA256, there is a presume is not a reversible computing. Described in the laws of physics above, that any non-reversible computing will require energy, and SHA-256 is used as a basis for Bitcoin mining. So that means, Bitcoin mining computing also requires energy.

Read More : Mining Energy Consumption and Bitcoin Ecology

4. About Understanding Pool Mining

The first thing we need to remember, that in mining Bitcoin, done by random process (random). Miners will never know when he will find the next block. If the miners can not find the next block, then the miners did not get anything.

If a miner looks at block distribution, and wants to see how many blocks you want and can be found in the first year, there will be a high variant. While the number of possible blocks can be found also low. So, if we imagine as a small miner. The possibilities of it seem to make miners small to have few options available.

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Mining Pool

Starting from the many difficulties faced by small miners, as well as the various risks encountered, then many of them who then work together and form an insurance company to alleviate the risk.

Initially a mining pool is formed because of the pattern of cooperation. So a group of miners join together and form a pool that serves to be able to do Bitcoin mining together. By specifying a designated coinbase receiver. The receiver, called the Pool Manager.

Thus, with this mutual mining, no matter who finds a block, that pool manager will eventually receive reward rewards. Furthermore, from the results received by the pool manager on the reward block found, will be distributed to each participant. And the pool, probably cut some of that amount as a fee for the pool service that each miner uses.

The assumption is that when a miner joins the pool mining, the miner also trusts the pool mining manager. So with the pattern of pool mining, small miners also have the opportunity to keep doing Bitcoin mining.