Bitcoin mining blockchain

about bitcoin mining

If you have little idea about bitcoin this is a mini bitcoin mining guide that explains in a few words the bitcoin mining process.

The key idea behind Bitcoin’s success is a decentralized protocol for maintaining a global ledger, called a blockchain. The blockchain records transactions between Bitcoin addresses, tracking the movement of every Bitcoin as it changes hands. This tracking ensures that no one can double-spend a coin, as the ledger makes it all too apparent whether a user sent out more Bitcoins from his account than he earned. The particular way in which Bitcoin tracking is performed makes sure that the record is also immutable; once a Bitcoin transaction is committed and buried in the blockchain, it is difficult for an attacker to reverse the transaction, so that a merchant can ship goods in good conscience, assured that the transaction will later not be reversed.

This protocol works through a process called bitcoin mining. In essence, the ledger is organized into a single, ordered sequence of blocks, each of which records a set of transactions. Each block contains a crypto-puzzle, a computationally difficult challenge akin to a CAPTCHA. Miners organize themselves into a loosely-organized, distributed network, and they all concurrently try to add a new block to the ledger. To do this, they need to discover the solution to a crypto-puzzle, formed by the contents of the ledger until the point where the new block is being added. Solving a crypto-puzzle is hard work; a computer has to plug in many different values and see if they solve the crypto-puzzle posed by the new block. The puzzles are such that a home computer working alone will take many years to solve a crypto-puzzle. Some people use GPUs to speed up this process, while others have invested in custom ASICs designed to solve Bitcoin crypto-puzzles.