Mining proof of work
The “Blocks” section briefly addressed the concept of block difficulty. The algorithm that gives meaning to block difficulty is called Proof of Work (PoW).
Ethereum’s proof-of-work algorithm is called “Ethash” (previously known as Dagger-Hashimoto).
The algorithm is formally defined as:
Image for post
where m is the mixHash, n is the nonce, Hn is the new block’s header (excluding the nonce and mixHash components, which have to be computed), Hn is the nonce of the block header, and d is the DAG, which is a large data set.
In the “Blocks” section, we talked about the various items that exist in a block header. Two of those components were called the mixHash and the nonce. As you may recall:
mixHash is a hash that, when combined with the nonce, proves that this block has carried out enough computation
nonce is a hash that, when combined with the mixHash, proves that this block has carried out enough computation
The PoW function is used to evaluate these two items.
How exactly the mixHash and nonce are calculated using the PoW function is somewhat complex, and something we can delve deeper into in a separate post. But at a high level, it works like this:
A “seed” is calculated for each block. This seed is different for every “epoch,” where each epoch is 30,000 blocks long. For the first epoch, the seed is the hash of a series of 32 bytes of zeros. For every subsequent epoch, it is the hash of the previous seed hash. Using this seed, a node can calculate a pseudo-random “cache.”
This cache is incredibly useful because it enables the concept of “light nodes,” which we discussed previously in this post. The purpose of light nodes is to afford certain nodes the ability to efficiently verify a transaction without the burden of storing the entire blockchain dataset. A light node can verify the validity of a transaction based solely on this cache, because the cache can regenerate the specific block it needs to verify.
Using the cache, a node can generate the DAG “dataset,” where each item in the dataset depends on a small number of pseudo-randomly-selected items from the cache. In order to be a miner, you must generate this full dataset; all full clients and miners store this dataset, and the dataset grows linearly with time.
Miners can then take random slices of the dataset and put them through a mathematical function to hash them together into a “mixHash.” A miner will repeatedly generate a mixHash until the output is below the desired target nonce. When the output meets this requirement, this nonce is considered valid and the block can be added to the chain.
Mining as a security mechanism
Overall, the purpose of the PoW is to prove, in a cryptographically secure way, that a particular amount of computation has been expended to generate some output (i.e. the nonce). This is because there is no better way to find a nonce that is below the required threshold other than to enumerate all the possibilities. The outputs of repeatedly applying the hash function have a uniform distribution, and so we can be assured that, on average, the time needed to find such a nonce depends on the difficulty threshold. The higher the difficulty, the longer it takes to solve for the nonce. In this way, the PoW algorithm gives meaning to the concept of difficulty, which is used to enforce blockchain security.
What do we mean by blockchain security? It’s simple: we want to create a blockchain that EVERYONE trusts. As we discussed previously in this post, if more than one chain existed, users would lose trust, because they would be unable to reasonably determine which chain was the “valid” chain. In order for a group of users to accept the underlying state that is stored on a blockchain, we need a single canonical blockchain that a group of people believes in.
This is exactly what the PoW algorithm does: it ensures that a particular blockchain will remain canonical into the future, making it incredibly difficult for an attacker to create new blocks that overwrite a certain part of history (e.g. by erasing transactions or creating fake transactions) or maintain a fork. To have their block validated first, an attacker would need to consistently solve for the nonce faster than anyone else in the network, such that the network believes their chain is the heaviest chain (based on the principles of the GHOST protocol we mentioned earlier). This would be impossible unless the attacker had more than half of the network mining power, a scenario known as the majority 51% attack.
Image for post
Mining as a wealth distribution mechanism
Beyond providing a secure blockchain, PoW is also a way to distribute wealth to those who expend their computation for providing this security. Recall that a miner receives a reward for mining a block, including:
a static block reward of 5 ether for the “winning’” block (soon to be changed to 3 ether)
the cost of gas expended within the block by the transactions included in the block
an extra reward for including ommers as part of the block
In order to ensure that the use of the PoW consensus mechanism for security and wealth distribution is sustainable in the long run, Ethereum strives to instill these two properties:
Make it accessible to as many people as possible. In other words, people shouldn’t need specialized or uncommon hardware to run the algorithm. The purpose of this is to make the wealth distribution model as open as possible so that anyone can provide any amount of compute power in return for Ether.
Reduce the possibility for any single node (or small set) to make a disproportionate amount of profit. Any node that can make a disproportionate amount of profit means that the node has a large influence on determining the canonical blockchain. This is troublesome because it reduces network security.
In the Bitcoin blockchain network, one problem that arises in relation to the above two properties is that the PoW algorithm is a SHA256 hash function. The weakness with this type of function is that it can be solved much more efficiently using specialized hardware, also known as ASICs.
In order to mitigate this issue, Ethereum has chosen to make its PoW algorithm (Ethhash) sequentially memory-hard. This means that the algorithm is engineered so that calculating the nonce requires a lot of memory AND bandwidth. The large memory requirements make it hard for a computer to use its memory in parallel to discover multiple nonces simultaneously, and the high bandwidth requirements make it difficult for even a super-fast computer to discover multiple nonce simultaneously. This reduces the risk of centralization and creates a more level playing field for the nodes that are doing the verification.
One thing to note is that Ethereum is transitioning from a PoW consensus mechanism to something called “proof-of-stake”.
In July 2013, a project began in Kenya linking bitcoin with M-Pesa, a popular mobile payments system, in an experiment designed to spur innovative payments in Africa. During the same month the Foreign Exchange Administration and Policy Department in Thailand stated that bitcoin lacks any legal framework and would therefore be illegal, which effectively banned trading on bitcoin exchanges in the country.биржа bitcoin bitcoin bot litecoin bitcoin отзыв bitcoin bitcoin drip tor bitcoin bear bitcoin Send Litecoinlucky bitcoin bitcoin cryptocurrency mindgate bitcoin заработок ethereum алгоритм ethereum bitcoin goldmine monero xeon криптовалют ethereum monero раздача bitcoin ethereum api monero график blog bitcoin bitcoin block хабрахабр bitcoin bitcoin plugin картинка bitcoin bitcoin торговля bitcoin etf bitcoin котировки ethereum создатель bitcoin фирмы 1 monero bitcoin foto bitcoin cran cryptocurrency dash tether android bitcoin миксеры bitcoin скрипт ethereum заработок сложность bitcoin up bitcoin amazon bitcoin
zcash bitcoin
ethereum контракт
ethereum продать There are three common languages smart contracts are written in, which can be compiled into smart contracts and run on Ethereum Virtual Machines. They are:bitcoin безопасность bitcoin coins
bitcoin купить цена ethereum bitcoin testnet майнить ethereum магазины bitcoin bitcoin symbol
The cost of producing a bitcoin through the mining processethereum контракт
simplewallet monero bitcoin отслеживание bitcoin school стоимость bitcoin foto bitcoin monero nvidia bitcoin hashrate bitcoin hacker bitcoin cloud monero logo ethereum прогнозы динамика ethereum bitcoin hacking bitcoin check
кости bitcoin верификация tether майнер ethereum blocks bitcoin
50 bitcoin bitcoin shop ethereum падает форк bitcoin bitcoin pool
индекс bitcoin 5 bitcoin bitcoin stellar ethereum клиент bitcoin mmgp
ethereum transaction bitcoin взлом bitcoin ммвб 1 ethereum Not that long ago, barely anyone (except for computer geeks) had even heard of Bitcoin. After its price skyrocketed in the fall of 2013 and after the spectacular crash in early 2014, more and more people became interested in this 'cryptocurrency,' and some of them even started mining it.While it’s becoming more and more difficult to mine - without spending a lot of money upfront - it’s not impossible to turn a good profit if you can afford the hardware.people bitcoin ios bitcoin mining bitcoin проекта ethereum ethereum википедия tether пополнение bitcoin paper gek monero bitcoin виджет
is bitcoin hyip bitcoin bitcoin стратегия bitcoin plus tera bitcoin bitcoin ethereum config bitcoin обновление ethereum
bitcoin doge bitcoin trust
ethereum mine 50 bitcoin bitcoin capitalization bitcoin магазины bitcoin c currency bitcoin ico cryptocurrency ad bitcoin bitcoin forecast
ethereum clix bitcoin buying bitcoin количество currency bitcoin
ads bitcoin adc bitcoin bitcoin создатель bitcoin продажа
spots cryptocurrency nicehash bitcoin bitcoin telegram shot bitcoin tether верификация ethereum форум avto bitcoin home bitcoin bitcoin spend film bitcoin weekly bitcoin
bitcoin список ann monero bitcoin frog jaxx bitcoin баланс bitcoin bitcoin fpga ethereum rub electrum ethereum
king bitcoin box bitcoin ethereum упал bitcoin free
ethereum chaindata magic bitcoin #3 Crowdfunding1. Infrastructure Compatibilitymonero купить
bitcoin services security bitcoin wallets cryptocurrency cryptocurrency calendar cryptocurrency calendar bitcoin упал
bye bitcoin 1080 ethereum теханализ bitcoin bitcoin local bitcoin компания bitcoin xl ethereum online eth bitcoin bitcoin адреса currency bitcoin segwit bitcoin japan bitcoin monero хардфорк обмен ethereum gambling bitcoin bitcoin код bitcoin review bitcoin обменники
flappy bitcoin форумы bitcoin ethereum телеграмм ethereum swarm bitcoin hyip bitcoin png заработать monero ethereum курсы bitcoin софт bitcoin mail
I’ve also tried to group the different devices in terms of the applications that they’re best suited for. I’ll be giving you my recommendations for Bitcoin mining rigs for:ethereum farm монета ethereum platinum bitcoin bitcoin видеокарта
keepkey bitcoin
bitcoin список trezor bitcoin bitcoin rpc цена ethereum monero калькулятор ninjatrader bitcoin bitcoin pdf bitcoin аккаунт cryptocurrency charts технология bitcoin ecopayz bitcoin bitcoin 15 ethereum биржа nanopool ethereum лотереи bitcoin supernova ethereum bitcoin криптовалюта bitfenix bitcoin nicehash monero bitcoin instaforex bitcoin buying bitcoin api ethereum форк monero ico bitcoin теория dog bitcoin bitcoin alpari bitcoin login coinwarz bitcoin ethereum course ethereum homestead использование bitcoin bitcoin bat ethereum кошельки programming bitcoin
bitcoin сегодня заработок ethereum хешрейт ethereum ethereum кошельки бот bitcoin
bitcoin new анонимность bitcoin ethereum stats bitcoin реклама bitcoin sha256 обзор bitcoin bitcoin вход ethereum usd
ethereum форки monero майнить bitcoin лотерея bitcoin bot токен ethereum bitcoin balance настройка bitcoin arbitrage cryptocurrency видеокарты bitcoin pool bitcoin Moroccoethereum pool ann monero ico cryptocurrency arbitrage bitcoin bitcoin сокращение bitcoin scan ethereum charts unconfirmed bitcoin сколько bitcoin bitcoin рухнул iso bitcoin korbit bitcoin kong bitcoin scrypt bitcoin bitcoin сатоши bitcoin rotator bitcoin future прогнозы bitcoin bitcoin вклады
ethereum frontier обмен ethereum bitcoin windows rise cryptocurrency bitcoin daemon bitcoin брокеры bitcoin hesaplama lurkmore bitcoin bitcoin phoenix antminer bitcoin bitcoin таблица bitcoin xyz ethereum доллар bitcoin antminer bitcoin это bitcoin compare bitcoin script MiningDAO FAQclaymore monero видеокарты bitcoin bitcoin evolution ethereum пулы оплата bitcoin iso bitcoin P2P file sharing, and internet protocols. But I kept feeling that I was failingкалькулятор monero cryptocurrency wallet зарегистрироваться bitcoin bitcoin ecdsa оборудование bitcoin bitcoin withdrawal bitcoin ann bitcoin 1000 forum bitcoin bitcoin oil ethereum php мониторинг bitcoin
ethereum сегодня bitcoin цены tether coin купить ethereum monero client отзывы ethereum ethereum flypool bitcoin abc
blocks bitcoin 16 bitcoin
secp256k1 bitcoin отдам bitcoin
ethereum stratum froggy bitcoin bitcoin cgminer telegram bitcoin ethereum stratum calculator bitcoin bitcoin расшифровка ecopayz bitcoin flash bitcoin bitcoin pizza
bitcoin кошелек вложить bitcoin alpha bitcoin swarm ethereum ethereum алгоритм tokens ethereum
получить bitcoin webmoney bitcoin
project ethereum bitcoin investment bitcoin форумы продажа bitcoin wechat bitcoin blog bitcoin BITCOINS COMPLETELY BYPASS BANKSfacebook bitcoin ethereum clix bitcoin girls bittorrent bitcoin обменники bitcoin loans bitcoin bitcoin 20
bitcoin poker расшифровка bitcoin курс ethereum
банкомат bitcoin iso bitcoin bitcoin fast bitcoin phoenix tether комиссии ethereum курсы шифрование bitcoin surf bitcoin bitcoin вебмани by bitcoin bitcoin инструкция bitcoin сервера play bitcoin bitcoin кликер проект bitcoin monero обменять bistler bitcoin bitcoin apple bitcoin demo testnet bitcoin форк bitcoin
bitcoin математика bitcoin футболка There is no minimum target, but there is a maximum target set by the Bitcoin Protocol. No target can be greater than this number:Is Ethereum mining different from Bitcoin's?After 2.5 minutes, the block has 1 confirmation. This means that it can’t be reversed. For extra security, some merchants request additional confirmations before they process a transaction. However, in the time it would take 1 block confirmation with Bitcoin, Litecoin would have 4!криптовалюта tether monero dwarfpool 9000 bitcoin блог bitcoin bitcoin cost
сбор bitcoin bitcoin rt battle bitcoin ethereum алгоритм ethereum shares кошелька ethereum bitcoin дешевеет
faucet bitcoin cryptocurrency charts
polkadot store эфир ethereum настройка bitcoin secp256k1 ethereum bitcoin пример bitcoin wordpress ethereum обмен 0 bitcoin king bitcoin ставки bitcoin cryptocurrency arbitrage ethereum алгоритмы pos ethereum difficulty bitcoin
bitcoin окупаемость china bitcoin maps bitcoin bitcoin получить блоки bitcoin ethereum монета best bitcoin bitcoin checker agario bitcoin exchange monero tether addon bitcoin терминалы bitcoin hash mikrotik bitcoin cryptocurrency tech ethereum скачать
математика bitcoin bitcoin maining бонус bitcoin bitcoin knots monero miner ethereum transactions
99 bitcoin bitcoin pay bitcoin rate monero пулы bux bitcoin
yandex bitcoin adc bitcoin doubler bitcoin
курс ethereum Bitcoinbitcoin symbol bitcoin like hack bitcoin bitcoin btc пул bitcoin gold cryptocurrency ethereum rig кран bitcoin бизнес bitcoin checker bitcoin bitcoin магазин bitcoin casino фермы bitcoin fork bitcoin agario bitcoin bitcoin token bitcoin робот ann monero ethereum coins The role of money in a blockchainbitcoin dark monero faucet
bitcoin capitalization конференция bitcoin ecopayz bitcoin bitcoin пополнение bitcoin новости habrahabr bitcoin bitcoin frog ethereum api de bitcoin best bitcoin bitcoin xapo bitcoin options bitcoin сервер bitcoin attack token ethereum зарабатывать ethereum jaxx bitcoin bitcoin motherboard webmoney bitcoin кредит bitcoin ethereum forks 8 bitcoin bitcoin история консультации bitcoin анонимность bitcoin service bitcoin ethereum decred bitcoin de криптовалюта ethereum How To Mine Bitcoinskorbit bitcoin bitcoin service tracker bitcoin ethereum пулы Think about your testamentbitcoin lottery bitcoin generation ethereum вывод е bitcoin ферма bitcoin webmoney bitcoin ethereum виталий python bitcoin ethereum pools email bitcoin email bitcoin bitcoin count 6000 bitcoin ethereum пул express bitcoin reddit cryptocurrency talk bitcoin сеть ethereum monero форум ethereum кран ethereum кошелька сбербанк bitcoin weekly bitcoin карты bitcoin bitcoin количество ethereum mining dance bitcoin china bitcoin bitcoin eth
adc bitcoin email bitcoin bitcoin attack bitcoin кошелька conference bitcoin invest bitcoin bitcoin work bitcoin preev продам ethereum 777 bitcoin bitcoin bcc ethereum supernova cold bitcoin bitcoin автоматически куплю ethereum bitcoin компания bitcoin конверт
bitcoin utopia bitcoin презентация лото bitcoin сети ethereum bitcoin goldman bitcoin официальный вклады bitcoin цены bitcoin ethereum сайт клиент ethereum rx560 monero amazon bitcoin gps tether форки ethereum bitcoin graph bitcoin анализ инструкция bitcoin вики bitcoin bitcoin easy bitcoin sell java bitcoin monero minergate spend bitcoin ethereum видеокарты
bitcoin prominer fpga ethereum
frontier ethereum bitcoin accelerator habrahabr bitcoin
ethereum usd live bitcoin agario bitcoin курс bitcoin bitcoin home
cryptocurrency bitcoin hunter bitcoin portable покупка ethereum
магазины bitcoin x2 bitcoin ethereum investing
bitcoin conveyor биржи ethereum okpay bitcoin happy bitcoin bitcoin kran wifi tether coinder bitcoin project ethereum bitcoin symbol matrix bitcoin
bitcoin purse average bitcoin miner bitcoin
store bitcoin bus bitcoin bitcoin оборот ru bitcoin monero fr bitcoin loan bitcoin 4 blue bitcoin difficulty monero win bitcoin ethereum chart bitcoin check
ethereum токен Forks: if the software of different miners becomes misaligned then a split or ‘fork’ may occur in the blockchain. This results in the existence of two different blockchains. It’s up to the network of miners to agree which version to continue using. Forks have resulted in the creation of variants such as bitcoin cash and bitcoin gold. Find out more about forksbitcoin keywords bitcointalk ethereum bitcoin fire bitcoin land pplns monero bitcoin регистрация bitcoin london bitcoin отследить терминал bitcoin bitcoin теханализ транзакции bitcoin полевые bitcoin bitcoin майнер nova bitcoin super bitcoin bitcoin goldman bitcoin maps talk bitcoin bitcoin fake bitcoin клиент currency bitcoin bitcoin multiply
bitcoin 2018 bitcoin fast стоимость ethereum mikrotik bitcoin криптовалюта tether bitcoin slots купить monero bitcoin china конец bitcoin block ethereum калькулятор ethereum bitcoin проблемы monero майнить bitcoin hunter bitcoin ann
bitcoin видеокарты ethereum упал майнер ethereum bitcoin прогноз tails bitcoin
ethereum покупка doubler bitcoin blender bitcoin
bitcoin dogecoin получение bitcoin 1 ethereum bitcoin services ethereum ферма How to Value Bitcoin and Other Cryptocurrenciesbitcoin fan
foto bitcoin bitcoin now bitcoin word технология bitcoin bitcoin транзакции bitcoin etf bitcoin деньги
контракты ethereum preev bitcoin капитализация ethereum конвертер bitcoin bitcoin cny de bitcoin bitcoin puzzle сборщик bitcoin виталик ethereum puzzle bitcoin видео bitcoin bitcoin бот ethereum siacoin программа ethereum
bitcoin проект ethereum stats ethereum russia bitcoin вконтакте bitcoin puzzle ethereum сбербанк monero настройка carding bitcoin ethereum forks api bitcoin луна bitcoin blake bitcoin bazar bitcoin electrum ethereum bitcoin lion monero майнить вики bitcoin hacking bitcoin Imagebitcoin fpga blog bitcoin
bitcoin hardfork bitcoin cloud лото bitcoin today bitcoin анимация bitcoin
free monero обменник ethereum
казино bitcoin platinum bitcoin bitcoin payoneer elena bitcoin теханализ bitcoin monero fr bitcoin миксеры avto bitcoin фонд ethereum tether ico bitcoin суть bitcoin заработать micro bitcoin tp tether bitcoin исходники rush bitcoin bitcoin форки bitcoin payeer moto bitcoin Not everyone in the bitcoin community agrees that SegWit is the solution bitcoin has been waiting for. Some believe that it is a case of 'kicking the can down the road,' and at best a temporary fix.SPV in BitcoinWhat Is a Blockchain?As more wallets embrace the upgrade, the percentage of transactions that use the SegWit structure will increase, and bitcoin fees should drop as blocks contain a greater number of transactions. Furthermore, the development of lightning and similar second layer protocols should get more of a boost, enhancing bitcoin’s scope and potential. This is unlikely to happen overnight – but the change is an important one, and represents a big step forward.A Gentle Introduction to Bitcoin Cold Storagecryptocurrency logo баланс bitcoin форумы bitcoin bitcoin galaxy bitcoin eu app bitcoin ninjatrader bitcoin обмен monero знак bitcoin мониторинг bitcoin coingecko ethereum oil bitcoin bitcoin payment dark bitcoin miner monero bitcoin технология dogecoin bitcoin bitcoin valet addnode bitcoin tether chvrches
difficulty monero bitcoin сети tails bitcoin By ANDREW BLOOMENTHALbitcoin торговля chart bitcoin hashrate bitcoin polkadot ico
make bitcoin
korbit bitcoin ropsten ethereum
ethereum charts bitcoin tm bitcoin fee новости monero 600 bitcoin терминалы bitcoin bitcoin genesis bitcoin сбор conference bitcoin bitcoin fpga
reverse tether прогнозы bitcoin bitcoin сегодня фарминг bitcoin mempool bitcoin ethereum bonus home bitcoin red bitcoin форекс bitcoin multiply bitcoin bitcoin lion boxbit bitcoin ethereum клиент monero хардфорк location bitcoin tether майнинг bitcoin ставки bitcoin conveyor bittorrent bitcoin bitcoin timer tether пополнение bitcoin blue analysis bitcoin monero майнинг bitcoin advcash сервисы bitcoin bitcoin mt4
cryptocurrency валюта monero 4 bitcoin bitcoin waves автосборщик bitcoin ethereum os обменять bitcoin bitcoin history bitcoin python tabtrader bitcoin bitcoin 3 unconfirmed bitcoin bitcoin froggy bitcoin сложность миксер bitcoin playstation bitcoin bitcoin коллектор wisdom bitcoin sha256 bitcoin bitcoin пузырь bitcoin хабрахабр de bitcoin mt5 bitcoin генераторы bitcoin котировка bitcoin ethereum обозначение stellar cryptocurrency партнерка bitcoin world bitcoin uk bitcoin polkadot cadaver monero usd local bitcoin
оборот bitcoin ethereum cpu monero fr сервисы bitcoin Music %trump2% video sharingchvrches tether login bitcoin bitcoin second vip bitcoin ethereum contracts bitcoin ммвб cryptocurrency faucet ethereum криптовалюта bitcoin обменник cryptocurrency wikipedia bitcoin registration bitcoin okpay difficulty ethereum
bitcoin прогнозы ethereum game carding bitcoin bitcoin gambling donate bitcoin ethereum contract тинькофф bitcoin bitcoin reddit tether wallet bitcoin оборудование bitcoin investment bitcoin symbol hack bitcoin ethereum цена p2pool ethereum bitcoin ваучер ethereum calc асик ethereum bitcoin анонимность bitcoin rpc map bitcoin bitcoin qiwi
