The Basics of Mining and Processing Units
Abelian is producing a state-of-the-art crypto-mining system and decentralized exchange, but do you even know the basics of mining? If you don't, this is the article for you. Mining is somewhat complicated, but also very systemic in the flow of events.
How does crypto-mining work? Take a gander below…
To begin we need to start off by defining some technical terms we see in crypto mining. Definitions include Hash, node, block, block header, Merkle root, Timestamp, Nonce, and Target Hash. Let us start by defining these new terms.
Hash or Hash Function is a fixed number of letters and numbers that is used to resemble a certain function, but in a way that is undetectable and non-reversible.
A node is simply a computer that is a part of a network completing a variety of specific tasks for that respective blockchain.
A block is a transactional record, starting with the genesis block (the first verified transaction). Each block contains most, if not all of the most recent transactions that have not been compiled in the previous block. Every confirmed block is linked together, creating the blockchain, or in other words, an immutable ledger.
The Block Header is a unique identifier that will label each block. The block header consists of a version number, previous block hash, Merkle root, timestamp, difficulty target, and nonce.
The Merkle Root is the hash of all the transactions in the block.
Every block has a Timestamp which acts as a source of variation for the block hash and also makes it more difficult for an adversary to manipulate the blockchain. The timestamp is an indication of a particular difficulty level.
A nonce is a number added to a hashed block that, when rehashed, meets the difficulty level restrictions. The nonce is the number that blockchain miners are solving for. Nonce stands for “number only used once.”
A Target Hash is a number that a hashed block header must be less than or equal to in order for a new block to be awarded. The target hash is used to determine the difficulty of the input.
These are the basic terms you will need to learn about the workings of blockchain mining. Now, let us go through the sequential flow of how mining actually works.
Miners and their respective rigs need to begin by solving the hash function. This difficult feat starts by looking back to the previous block — in specific, looking at the block header. The block header consists of a version number, a timestamp, and the hash used in the previous block. A miner’s job is to determine if the previous nonce which is hashed again is equal to or less than the targeted hash. If so, that miner receives a reward.
Due to the problem of a large number of permutations, miners need to produce a larger sample possibility of what is trial and error. The more powerful mining rigs can produce these tests much faster and more efficiently than those with lesser computational power. Once the miner is successful at solving the hash function, he/she will earn the mining reward (transaction fee).
Although it may seem complicated, mining is actually just trying to solve randomly adjusted letters and numbers similar to a cipher.
As stated above, a miner’s rig is proportional to the ability to solve a hash function. There are three main processors that are used to mine cryptocurrencies: GPU, ASIC, and FPGA miners.
The Graphics Processing Unit (GPU) is a broad-based chipset that is useful in its ease of switching which coins to mine due to exogenous factors affecting price, difficulty, etc. These are the most common type of units used by small hobby miners, though their processing power does not compete anywhere close to ASIC and FPGA units. GPUs are the graphics cards that are installed into computers to allow them to render computer game graphics efficiently.
Application Specific-integrated Chips (ASIC) are highly specialized units that are very profitable machines, but due to their over specification, they become increasingly less useful in downturns in the market, as well as when they are competing with more miners utilising ASICs.
Field-programmable gate array (FPGA) is an up and coming design that is harder to configure and set up than the previously mentioned units, but these are looking like a viable option for miner switching automation. FPGA creates logic blocks, tables full of inputs in which it then decides desirable output points.
All three of these options have unique positives and negatives, so it is necessary to understand and optimize your rig depending on your individual preferences. One of the major differences the three processors listed above have is the amount of energy required for them to operate optimally. A factor such as energy costs is crucial to determine cost/benefit feasibility. Another reason to consider is what coin would you like to mine, and what units are optimal for that particular coin.
Now you know the basics of blockchain mining and mining processing units. Abelian is developing an advanced, AI-powered mining platform that will cater to all processing units, automatically scanning hardware to determine the most optimal coin to mine. Check out the Abelian website and join their Telegram to learn more,
