Complete Explanation of Bitcoin Mining_Part #1 (Miner Role And Function)

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Steemians! Since the first time the discovery of digital currency (bitcoin) by Satoshi Nakamoto in 2009, since then the beginning of the financial revolution around the world. And after seven years from the beginning of its appearance, the price of this one digital currency continues to rise. If at the beginning of its appearance, the bitcoin price at that time: $ 0.00076 only. Now in 2017 per 1 bitcoin the price has reached approximately $ 7400 in the last month. What a remarkable achievement of a digital currency that was once underestimated.

As we all know, Bitcoin runs in an online system, and the purpose of mathematical calculations is to verify the bitcoin transactions that exist on the Internet. And to get 1 bitcoin required a process of solving the codes performed by a sophisticated computer or more often said to mining. And this bitcoin mining process will be discussed in depth, and so as not to confuse. This discussion will be divided into several parts. In this article we will discuss about "The Role And Function Of Miners".

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

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The Concept of Bitcoin Mining

Bitcoin mining is a process of mathematical calculation performed on Bitcoin network. 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 Bitcoin-seeking activities are mining Bitcoin. Like looking for Free Bitcoin via faucet, giveaway, play game gets free Bitcoin, post can bitcoin, considered mine. And to correct this false assumption we make this simple article, hopefully with this explanation it can give meaning "mine Bitcoin" which is really its.

The Role And Function Of Miners

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 "bitcoin mining".

To be able to mine Bitcoin, a miner must use a set of mining tools. Can use CPU, GPU, FPGA, and ASIC. An explanation of this device will be discussed in the next section. Well, what exactly is this miner Bitcoin doing?

At the bottom Bitcoin mining process is similar to the 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 the conventional mining process (not digital).

Being similar, because sometimes there are miners who feel loss, because it can not and difficult to find gold, and some are successful. 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. So what are the miners doing? When someone connects to a Bitcoin network using a device, the node will perform a series of tasks. The tasks performed are:

Listening to deals.
All nodes that are connected in the Bitcoin network must listen to all transactions that occur. Followed by validating the audited transaction. By checking the digital signature. It is related to the truth of digital signatures and the output included in the transaction must be completely unfulfilled (not yet issued in other transactions-ensuring no double spending).

Keep Blockchain and listen to the new block created.
A miner, actually serves to keep the blockchain. Related to handling all transactions that occur. Miners too, will retain Blockchain which has kept all transactions. Miners can also request all the history of the block to another node that has entered before it enters the network.

Listen to new blocks that are broadcasted within the network, then validate the received blocks. Because in the block there is a series of transactions, then every transaction that is in the block and even then also must be validated, and valid.

Finding Nonce to be a valid block
After we validate all transactions on the candidate block earlier, then is looking for nonce (a 32-bit (4-byte) field whose value is set so that the hash of the block will contain a run of leading zeros) in order to make the block valid. The step here is the most difficult step faced by miners.

Hope Blocks are accepted
This is the second difficulty encountered. So if we find a new block, there is no guarantee that the block will be part of the blockchain consensus. Miners need luck here. Expect other miners to accept the proposed block. So we can start mining above the block. So not on other miners' blocks.

Receive Advantages
If it turns out that another miner received our block as a valid block, it will get a reward of 25 Bitcoin (which is still valid at this time). In addition, if several transactions within the block are listed transaction fees, the miner can collect all the transaction costs.

Well, these six things are things that must be done by the miners. So clearly, that mine is not interpreted as in the search for Bitcoin in the faucet, giveaway or the other. However, mine here means using a certain tool, which in the process of doing the six things mentioned above.

Of the six things, we can classify in two ways :

The first thing: Some of the task is to validate the transaction
Serves to help Bitcoin network as a most important function for Bitcoin and Blockchain system can continue to run and exist. So miners, is the main thing that will run all the Bitcoin protocols.

The second thing: The other task is to race each other to find new blocks and make a profit
Why race each other? because basically the miners will get reward block incentives, for those who managed to find new blocks. So it is likened to a race to seek and find new blocks. And the incentive given, used as a stimulus of the miners in doing his work.

Then how can i find a valid block?

To answer this question, it will be related to the Nonce that must be found in order to be a valid block.

We need to understand that in each header block, it will point to the previous block header. And within each block, there will be a merkle tree of all transactions inside the block.

Miners, first compile a set of valid transactions, owned from the pending transaction pool (pool of pending transactions or commonly referred to as mempool), then inserted into the merkle tree.

In this case, a miner can enter many transactions, until the whole reaches a total of less than 1megabyte (current block size limit). Then, create a block header that shows the previous block.

In this block header, there is a nonce size of 32 bits. So the miners can try this nonce many times (can be started with the value of nonce 0) then increase the successive numbers until successfully find nonce that will be able to make the block to be valid. The goal is to find one that can cause the hash of the block to be below the target.

Generally miners will try every possible value from bit 32 for the nonce. However, there may not be a single one that can generate valid hashes. If this happens, usually the miners will make a change to the Coinbase transaction, which allows miners to change the value of 32 bits. Because there is an additional nonce in the coinbase transaction. After changing the additional nonce in the coinbase transaction earlier, the miners can start looking for nonce again in the block header.

If you have made a nonce change in the transaction coinbase, then all merkle tree also changed. Because the nonce changes will spread to all paths in the merkle tree. It can be said that additional nonce changes, its nature as if more difficult than changing the nonce in the block header.

The thing to remember is that no miner solves the same puzzle, since the blocks are one with the other, of course there will be a different order of transactions. And if there are two miners working on blocks whose transactions are identical though, the blocks will remain different.

Difficulty level

The difficulty level for finding a valid block is that the miners will try to get the desired one. Ie the hash value must be lower than the target (is bit 256 on base 16), the lower the value, the level of difficulty will also increase. So that means, the level of difficulty is the lower the value of the target.
Say, the miner is trying to find the block hash + random number in base16, which is lower than the target.

Take, for example, at one time the difficulty level in hexadecimal is:

0000000000000000172EC0000000000000000000000000000000000000000000 (base16)

If converted to base10 is:

568436119447114618883887501211268589217582000336195813376

If the miners get their hash in base10:

568436119447114618883887501211268589217582000336195813376+ 1,

Since the hash is + 1 then it means the miner is unsuccessful, and should try again, try again, and again, until it finds a value lower than its target.

Determination of Difficulty Levels

The difficulty level will change each time until 2016 blocks. The time range is approximately 2 weeks. The change of difficulty level, adjusted from how efficient the miners during the previous 2016 block period. So this kind of calculation of the difficulty level in mining Bitcoin:

x = (y x 2016 x 10 menit) / (z)

x = Next Difficulty Level
y = Difficulty Level Previous
z = The time taken to mine 2016 the last block
10 minutes = average creation time of 1 block

In the above calculation, 2016 x 10 minutes will result in exactly 2 weeks time. So that 2016 block will be created later will take approximately 2 weeks. Each Bitcoin miner will calculate the level of difficulty. And it will only accept blocks that meet the criteria at the level of difficulty they can count.

Bitcoin's mining difficulty will continue to increase. But the increase will not always be stable and linear, but depends on the activities of its miners, also on the situation in the market. Due to the large number of new miners who join, and the mining level is supported by the emergence of more efficient devices, the blocks will be found more quickly. So the level of difficulty was so increased.

Then the time it takes will always be around the average in 10 minutes to find and create a new block. What if in finding blocks, it takes an average of more than 10 minutes? If this happens, then the difficulty level will drop.

Well, this is the end of our discussion about the role and function of miner Bitcoin this time, and hopefully this article can help you who are engaged in bitcoin mining. And continue to follow this blog because in the next post we will discuss in depth about "Hardware Mining Bitcoin". Regards!

Reference Sources:
edukasibitcoin
maxmanroe

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