Amazing-Python-Scripts
What Is Bitcoin Mining?
Bitcoin mining is performed by high-powered computers that solve complex computational math problems , these problems are so complex that they cannot be solved by hand and are complicated enough to tax even incredibly powerful computers.
Terminology :
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Transaction : An transaction is a transfer of Bitcoin value and are collected in Blocks
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SHA256: a function which can generate an almost-unique 256-bit (32-byte) signature(Hexa-Decimal) for a text.
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Block: Blocks are files where data pertaining to the Bitcoin network are permanently recorded
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Nonce : Miners have to guess this number which will reward them Btc , A nonce is an abbreviation for "number only used once," which is a number added to a hashed—or encrypted—block in a blockchain that, when rehashed, meets the difficulty level restrictions.
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Difficulty Level : Number of prefix Contagiuos Zeroes
Theory :
Btc will be rewarded if Nonce gives us string with prefix of Zeroes the difficult number of times. sounds confusing?
So,Let's take example :
- Let's assume we have difficulty level = 20
- Now, Let's again assume that we have previous hash as : 'a5x208fecf9a66be9a2bc7...'
- Now we create text as : text = str(block_number) + transactions + previous_hash + str(nonce)
- Now we pass text to SHA256 Function to generate hash
- Finally, that hash prefix must be equal to number of zeroes as difficulty level.
- And Boom!! You have mined succesfully.
Draw Backs:
The script has no drawbacks but due to increase in miners , the difficultly level increases and hence we'd require best hardware as fastest wins.
Refrences:
https://www.investopedia.com/terms/b/bitcoin.asp