What are bitcoin miners actually doing?

Source: Help Net Security

Before we get into the specifics, let’s take a look at how miners have evolved over time. Initially, the level of mining difficulty was extremely low.

Bitcoin could be mined profitably on a simple central processing unit of a personal computer in the early days (CPU). People began mining on GPU cards in less than two years because they were more adaptable to higher clock speeds with the addition of some software. That is, they were able to perform more calculations per second by using parallel processing. These, like CPUs, were profitable for only a few years.

In 2012, the first ASIC mine operator was released.

The performance of a miner is measured in hours per second (H/s). This is due to the fact that they are literally brute force in their search for the correct output, forcing million hash function inputs. At the time of writing, the fastest miners on the market had a hash rate of more than 100 TH/s, or 100 million hash attempts per second.

 ASICs are extremely fast because they are purpose-built. They are intended to solve a single cryptographic hash, SHA256 in the case of Bitcoin. A bitcoin miner could use SHA256 to mine any other encryption device, but due to the miner’s high energy consumption, it is unlikely to be profitable. Because of the high demand for electricity, mineral operators look for the cheapest energy available, which is often renewable or otherwise streamlined.

Header and transaction list

A Bitcoin block is made up of two parts: a header and a transaction list. The header contains data about the software, the transaction, the nonce, the previous block hash, and the target. The entire block’s contents have been hacked. The nonce, which is a random number between 0 and 232, is appended at the end of the hash. Both have been hacked together once more.

To be more competitive, mining operators who implement multiple miners frequently use specific software to delegate operations to individual miners.

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