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What Is Ethereum Mining? [the Most Comprehensive Step-by-step Guide]

What Is Ethereum Mining? [the Most Comprehensive Step-by-step Guide]

What is Ethereum Mining? [The Most Comprehensive Step-by-Step Guide] TLDR: Ethereum Mining is a computationally in-depth work that requires a lot of time and processing power. A minergets rewarded for providing solutions to challenging math problems via blockchain technology, just like bitcoinmining.Ethereumis the first world computer. Understanding Ethereum Mining and the Need for Proof of Stake. Mining is the lifeblood of all POW based cryptocurrencies. When miners mine to form new blocks to add to the blockchain. Miners use heavy duty computational power to solve cryptographical puzzles to satisfy a difficulty level. Understanding Ethereum Mining and the Need for a Stake/Proof of Work Hybrid Model This is one of the most path-breaking mechanisms in blockchain technology. Earlier decentralized peer-to-peer digital currency systems used to fail because of something called the Byzantine Generals Problem. The proof-of-work consensus system finally provided a solution to this problem. Ok so imagine that there is a group of Byzantine generals and they want to attack a city. They are facing two very distinct problems: The generals and their armies are very far apart so centralized authority is impossible, which makes coordinated attack very tough. The city has a huge army and the only way that they can win is if they all attack at once. In order to make successful coordination, the armies on the left of the castle send a messenger to the armies on the right of the castle with a message that says ATTACK WEDNESDAY. However, suppose the armies on the right are not prepared for the attack and say, NO. ATTACK FRIDAY and send back the messenger through the city back to the armies on the left. This is where we face a problem. A number of things can happen to the poor messenger. H Continue reading >>

A Short History Of Ethereum Consensys Media

A Short History Of Ethereum Consensys Media

From a birds eye view, blockchain technology has not been around for a long time. Though the foundational concepts (cryptography, decentralization, peer-to-peer networking & transaction) have been studied for decades, not until Bitcoins release in 2008 can all those components be confidently seen as having come together to create a functional product. Ethereum in particular has been around in usable, public format only since 2015. Though the dates and details of its projected evolution have changed, Ethereum has stuck with its plan to consistently upgrade the protocol to ensure improved usability, security, functionality, and decentralization. With the recent Constantinople upgrade in February, Ethereum is on the cusp of Serenity (also known as Ethereum 2.0), to be reached through a series of hard forks and upgrade phases, including Ethereum 1.x. To understand where we are going, however, we must look back at and understand from where we came. This timeline looks at the history of Ethereums significant (un)planned hard forks and upgrades in preparation of its next phase of evolution. The Ethereum blockchain sprung into public existence in July 2015. The immediate step before that, however, was Olympic the ninth and final proof of concept open testnet, available to developers to explore what the Ethereum blockchain would look like once released. Vitalik announced a total reward of 25,000 ETH to developers who spent their time stress-testing the network. The request was clear: try to overload the network and do crazy things with the state to provide insight into how the protocol would handle high traffic. Developers were given four categories to test: Transaction Activity, Virtual Machine Usage, Mining Prowess, and General Punishment. After a couple months of stress test Continue reading >>

Ethereum Daily Mining Rewards Re At Lowest Level Ever Reported

Ethereum Daily Mining Rewards Re At Lowest Level Ever Reported

Ethereum Daily Mining Rewards re at Lowest Level Ever Reported New Ethereum (ETH) is being generated through mining is at its lowest rate ever. Ethereum (ETH) is being minted at the lowest rate since the blockchain was first created New Ethereum ( ETH ) being generated through mining is at its lowest rate ever, Etherscan data reveals on Feb. 11. According to Etherscan, on Feb. 10, 13,370 new ETH have been created, down from over 20 thousand in December 2018 and an all-time-high of over 39 thousand reported on July 30, 2015. The recent sharp decrease in the quantity of newly mined ETH was evidently caused by a sudden increase in Ethereum mining difficulty, which Etherscan data revealed on Feb. 10. As Cointelegraph reported in September last year, Ethereums core developers decided on their regular meeting on August 31, 2018 to delay the so-called difficulty bomb, by agreeing to include the code for such a change into the upcoming Constantinople hard fork . The difficulty bomb, also known as Ethereums ice age, is a mechanism implemented on the Ethereum chain which makes Proof of Work ( PoW ) mining ETH progressively harder (increasing the difficulty). The reason for the implementation of this feature is to prevent miners from continuing their activity on the chain after Ethereums switch to a Proof of Stake ( PoS ) consensus algorithm. Still, PoS implementation has been delayed multiple times, which is why Ethereum developers have delayed the difficulty bomb though updates as they plan to do with the Constantinople hard fork. Moreover, delaying the ice age also lowers mining difficulty. To compensate for the easier mining process, Constantinople will also feature the so-called thirdening: a reduction of the reward for every miner block from 3 to 2 ETH. Such an update would Continue reading >>

Ethereum Blocks Drop To 12 Seconds

Ethereum Blocks Drop To 12 Seconds

Average block times in ethereum have dropped to their lowest level ever at just 12.5 seconds, down from 21 seconds per block. Thats after the Constantinople upgrade kicked-in on Thursday, delaying the difficulty bomb for another 12 months. A fall in average block-times has been seen after similar delays of the difficulty bomb, but this time the average has fallen by circa 30 seconds more than previously according to etherscan data and by about 1 minute more according to ethstats (pictured above). Recent eth average block times, March 2019. Etherscan is a day behind, while ethstats seems to calculate it in real-time, with the hashrate seeing no change recently. A sudden increase in hash makes block finding quicker until the difficulty adjusts, so that could be an explanation for the degree of fall in block-times, but depending on where it levels off, it might be just a result of temporary adjustments to complex parameters following the ice age delay. As can be seen the hash has fallen, but in the past two-three weeks it has been relatively stable. When hash falls, blocks are generally more difficult to find as there are less miners working at the same difficulty level until that adjusts by the block in eth. When hash rises, the useless math calculations are easier to solve because difficulty has not yet increased to account for the increased mining power. After a few blocks, it then adjusts. Then theres the difficulty bomb, a protocol level algorithm that after a certain block number starts to slowly, but exponentially, increase the difficulty level of finding a block to the point it eventually is effectively impossible to mine. Thats there to take miners out of the equation when it comes to the Proof of Stake (PoS) upgrade which appears many years away as ethereum will Continue reading >>

Ethereum Difficulty Bomb & Inflation Rate Explained

Ethereum Difficulty Bomb & Inflation Rate Explained

Ethereum Difficulty Bomb & Inflation Rate Explained By Shawn Dexter / September 5, 2018 In this post, Shawn explains the Ethereum Difficulty Bomb. The recent debate around the Ethereum Inflation rate has many people discussing the current ethereum mining rewards & "difficulty bomb". But what is the difficulty bomb? Shawn explains it clearly andsuccinctly! With Ethereum's Constantinople update coming up on January 16th 2019, there have been an increasing number of questions regarding Ethereum's "Difficulty Bomb". Most other explanations out there are either far too complex are simply wrong. Ethereum Difficulty Bomb: The Simple Explanation The Ethereum Difficulty Bomb simply refers to a tool within Ethereum. This tool allows the core Ethereum developers to adjust how difficulty it is for a miner to win a reward.Miners win rewards each time they create a new block and add it to the blockchain. When the Ethereum Difficulty Bomb is set to "detonate", it will get exponentially difficult for miners to win rewards via mining. But why would the developers want this? Because eventually they will want miners to stop mining and start validating.Remember, Ethereum is set to transition from Proof of Work to Proof of Stake . There is no mining in Proof Of Stake. We will have validators instead. Ethereum Difficulty Bomb: A Dis-Incentive For Miners Even though Ethereum may switch to the Proof of Stake chain, the miners may continue mining on the Proof Of Work chain if not properly incentivised. In order to avoid security issues (like a fork), the developers wanted to give the miners a little "nudge" to switch to Proof Of Stake. The Ethereum's Difficulty Bomb would reduce their rewards on the Proof Of Work chain, and thus incentivise them to switch to the Proof Of Stake Chain. Why Was T Continue reading >>

Ethereum Classic Difficulty Formula

Ethereum Classic Difficulty Formula

The Ethereum Classic (ETC) difficulty is the likely number of hashes a miner will have to calculate to add the next block on the blockchain. Adjustments to the difficulty lead to blocks being added on average about every ten seconds. I will describe how the difficulty is calculated. The difficulty of the first (genesis) block is 131,072. The difficulty of future blocks is found using the following formula: max(131072, D + max(1 - T // 10, -99) (D // 2048)) D is the difficulty of the previous block (parent), T is the difference in seconds of the creation time from the parent, and, // denotes integer division. Notice the difficulty is never less than that of the genesis block. Notice also there is no change in the difficulty when T is ten seconds. The most the difficulty can ever increase in one block is D // 2048. The most the difficulty can ever decrease in one block is -99 D // 2048. Here is Python code to calculate the difficulty of future blocks: def difficulty(Dp, dT): """ Calculates the difficulty of blocks. Dp is the difficulty of the parents. dT the difference in seconds of the creation times from the parents. """ return max(131072, Dp + max(1 - dT // 10, -99) * (Dp // 2048)) Here is the difficulty calculation for block 7,190,125. Notice the difficulty is unchanged: >>> print(hex(difficulty(0x79f80be54f05, 10)))0x79f80be54f05 Here is the difficulty calculation for block 7,006,084. Notice the difficulty increases: >>> print(hex(difficulty(0x7ed4865d8c48, 1)))0x7ee460ee57f9 Here is the difficulty calculation for block 7,116,610. Notice the difficulty decreases: >>> print(hex(difficulty(0x709d39938c3e, 72)))0x7048c3a85d98 The difficulty formula adjusts the mining process so that blocks are added to the ETC blockchain on average about every ten seconds. Hopefully th Continue reading >>

Mining Ethereum/wiki Wiki Github

Mining Ethereum/wiki Wiki Github

The word mining originates in the context of the gold analogy for crypto currencies. Gold or precious metals are scarce, so are digital tokens, and the only way to increase the total volume is through mining it. This is appropriate to the extent that in Ethereum too, the only mode of issuance post launch is via the mining. Unlike these examples however, mining is also the way to secure the network by creating, verifying, publishing and propagating blocks in the blockchain. Mining Ether = Securing the network = verify computation Ethereum Frontier like all blockchain technologies uses an incentive-driven model of security. Consensus is based on choosing the block with the highest total difficulty.Miners produce blocks which the others check for validity. Among other well-formedness criteria, a block is only valid if it contains proof of work (PoW) of a given difficulty.Note that in Ethereum 1.1, this is likely going to be replaced by a proof of stake model. The proof of work algorithm used is called Ethash (a modified version of Dagger-Hashimoto ) involves finding a nonce input to the algorithm so that the result is below a certain threshold depending on the difficulty. The point in PoW algorithms is that there is no better strategy to find such a nonce than enumerating the possibilities while verification of a solution is trivial and cheap. If outputs have a uniform distribution, then we can guarantee that on average the time needed to find a nonce depends on the difficulty threshold, making it possible to control the time of finding a new block just by manipulating difficulty. The difficulty dynamically adjusts so that on average one block is produced by the entire network every 12 seconds (ie., 12 s block time). This heartbeat basically punctuates the synchronisation Continue reading >>

Ethereum Difficulty Historical Chart

Ethereum Difficulty Historical Chart

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How Difficulty Adjustment Algorithm Works In Ethereum

How Difficulty Adjustment Algorithm Works In Ethereum

How Difficulty Adjustment Algorithm Works in Ethereum In order to explain the logic of difficulty adjustment, we will use the go implementation of Ethereum which is generally called Geth. Source code of Geth can be found here. Difficulty adjustment algorithm is coded inin block_validator.go file, which can be found here. By difficulty adjustment we mean the logic in Ethereum using which Ethereum tries to keep mining time of the blocks between 10 to 19 sec. If difference in mining time is between 0 to 9 sec. then Geth tries to increase the difficulty to mine the block and if difference is 20 sec. or more, then Geth tries to reduce the mining difficulty of the system. In block_validator.go file, function CalcDifficulty is called to adjust the difficulty of the system and it returns the difficulty of the next block when it will be created. This function, in return, calls calcDifficultyHomestead or calcDifficultyFrontier depending on the configuration parameters. Latest version of Ethereum uses calcDifficultyHomestead function, therefore we will be reviewing calcDifficultyHomestead function. In order to calculate the difficulty of the new block, this function needs following input parameters: time Proposed time of formation of new block parentTime Time of formation of parent Block parentNumber Parent block, block number. Below is step by step process how difficulty of new block gets created. 1. First, difference between time of formation of parent block and new block is calculated. 2. Output of step 1 is then divided by 10 and integer of it is stored. This is done to create ranges. If output of step 1 is between 1 9 then output of this step will be 0. If output of step 1 is between 10 19 then output of this step will be 1. If output of step 1 is between 20 29 then output o Continue reading >>

Ethereum Difficulty Bomb Explained Simply 2019

Ethereum Difficulty Bomb Explained Simply 2019

Ethereum Difficulty Bomb Explained Simply 2019 By Shawn Dexter / January 13, 2019 Ethereum's Difficulty Bomb is often misunderstood. Most explanations are convoluted and technical. This post is a simple & quick explanation of what is the Ethereum Difficulty Bomb. Shawn also explains it's relation to the block reward reduction in Ethereum and the Constantinople update! With Ethereum's Constantinople update coming up on January 16th 2019, there have been an increasing number of questions regarding Ethereum's "Difficulty Bomb". Most other explanations out there are either far too complex are simply wrong. In this post I will give you guys asimple and clear explanation of what Ethereum's Difficulty Bomb really is and why it was put in place. Ethereum Difficulty Bomb: The Simple Explanation The Ethereum Difficulty Bomb simply refers to a toolwithin Ethereum. This tool allows the core Ethereum developers toadjust how difficulty it is for a miner to win a reward.Miners win rewards each time they create a new block and add it to the blockchain. When the Ethereum Difficulty Bomb is set to "detonate", it will get exponentially difficult for miners to win rewards via mining. But why would the developers want this? Because eventually they will want miners to stop mining and start validating. Remember, Ethereum is set to transition from Proof of Work to Proof of Stake. There is no mining in Proof Of Stake. We will have validators instead. Ethereum Difficulty Bomb: A Dis-Incentive For Miners Even though Ethereum may switch to the Proof of Stake chain, the miners may continue mining on the Proof Of Work chain if not properly incentivised. In order to avoid security issues (like a fork), the developers wanted to give the miners a little "nudge" to switch to Proof Of Stake. The Ethereu Continue reading >>

Go Ethereum - What Is The Unit For Measuring Difficulty - Ethereum Stack Exchange

Go Ethereum - What Is The Unit For Measuring Difficulty - Ethereum Stack Exchange

What is the unit for measuring difficulty The last block of my private net has the difficulty of 5162920460. But what unit is it? Because it is not hash rate, the hash rate is when you divide the difficulty by the average block time which in my case is 5162920460/14 = 368780032.857142857 , which is 368.7 Mega hashes per second. Are my calculations correct? Just to note, the term isn't described in the glossary ( github.com/ethereum/wiki/wiki/Glossary ) but posting here as the link may help some people in the future. Nov 2 at 16:24 that glossary has a mistake. they are saying that the average time for finding a block in Ethereum is 1 min, this is incorrect, it is 14 seconds. quote: eg. N = 10 for Bitcoin and 1 for Ethereum Nulik Nov 2 at 16:43 Difficulty units are basically "hash/solution" (sort of). It's a measure of how much work is required to find a hash with some # of leading 0s. Your calculations are correct, difficult is designed to float with hash power, so you can estimate the current hash rate from the difficulty. (X hash/solution) / (Y second/solution) = Z hash/second In the case of Ethereum, Y=~14 seconds. The calculation for difficultly attempts to keep Y at ~14 seconds by modifying difficulty (X) to match the current hash rate (Z). However, the protocol is not inherently aware of Z, so it estimates Z based on the time between the current and previous blocks. Therefore we usually don't think of difficulty as having any specific units, except to act as a measure of how much work is required to find a block solution. If dividing the difficulty by seconds gives you Hashes/second then the unit of difficulty must by Hashes. However, the way it's defined in the yellow paper implies that it's a number that does not have any units (similar to coefficient of frictio Continue reading >>

Ethereum's Blockchain Is Once Again Feeling The 'difficulty Bomb' Effect - Coindesk

Ethereum's Blockchain Is Once Again Feeling The 'difficulty Bomb' Effect - Coindesk

Ethereum is being affected by what is popularly known as the difficulty bomb embedded in the code and this months upcoming hard fork is expected to once again push its effects further into the future. The piece of code was originally created in an effort to create an incentive a negative one at that for miners and developers to manage the transition from proof-of-work consensus to proof-of-stake. In effect, the difficulty bomb as referenced back in 2015 by former ethereum CCO Stephan Tual raises the difficulty level of mining a block on the ethereum blockchain exponentially over time. The bomb began to go off so to speak last December after being delayed once in June 2017 and again in October 2017 . The initial impacts of the code though minor to start off with are slowly but surely starting to become noticeable on the network, as the data shows. As reported by blockchain analytics site Etherscan, the ethereum blockchain saw its lowest level of daily block reward issuance Monday with a recorded 13,131 ETH . By comparison, as late as mid-November, new issuance was regularly seen above 20,000 ETH. Whats more, Etherscan reports a clear decline since December in thenumber of blocks produced on ethereum per day, which sits at present below 4,500 blocks. Afri Schoedon release manager for ethereum client Parity estimates if left unaddressed, it would take two to three months from now for the difficulty bomb to stall the ethereum blockchain to new record-lows. Yet before that happens, the bomb is actually expected to be delayed again for a period of 12 months as part of a system-wide upgrade known as Constantinople . Constantinople which is scheduled to launch later this month at block number 7,280,000 will, among other changes to the network, stabilize average block count to Continue reading >>

Ethereums Difficulty Bomb Will Change The Currency Foreverwhen It Finally Drops

Ethereums Difficulty Bomb Will Change The Currency Foreverwhen It Finally Drops

Ethereums difficulty bomb will change the currency foreverwhen it finally drops After finding bugs in the code they were testing, Ethereums core developers have decided to postpone the networks scheduled hard fork , which was supposed to happen next month, until 2019. The delay of the software upgrade, called Constantinople, will give the group more time to stew over a controversial proposed change to the networks monetary system. The contentious proposal is related to something called the difficulty bomb, a piece of Ethereums code that steadily increases the difficulty of mining new blocks. The bomb was originally conceived as part of a larger plan to transition the Ethereum network from the energy-intensive process it uses to agree on its ledger , called proof of work, to a more energy-efficient one called proof of stake . Its supposed to deter miners from continuing to mine the old chain once the network switches. But developing a proof-of-stake system is taking longer than expected, so the difficulty bomb must be delayed. And since that will make mining easier, Ethereums core developers have decided they must reduce the reward to counterbalance this effect. How to do this is a matter of some dispute . Unlike Bitcoin, which has a capped supply, Ethereums currency is uncapped and has no formal monetary policy. There are a range of opinions in the community about how best to adjust the issuance rate to account for delaying the bomb. Ultimately, the core developers had landed on changing the block reward from three ether to two, but now the upgrade is delayed until at least January. Decentralized decision-making is hard. Keep up with the fast-moving and sometimes baffling world of cryptocurrencies and blockchains with our twice-weekly newsletter Chain Letter. Subscribe Continue reading >>

Ethereums Eip 2/4: 15 Second Blocktarget

Ethereums Eip 2/4: 15 Second Blocktarget

This article explains the difficulty adjustment algorithm employed in Ethereum since the Homestead release on March 14th, 2016. The achievement of an average 15 second block solving time is explored in detail. Ethereum had a block difficulty targeting problem before the Homestead release: it relied on a median target of 13 seconds but the average was drifting higher and higher. Miners had discovered they could mine blocks with the timestamp exactly one second higher than the previous block (the parent block), having the effect of achieving a higher difficulty than other blocks that might be solved, thus giving their solution primacy over other forks. Thus, it was in the miners economic interest to use this method of solving blocks even if it meant, on average, the time to solve blocks would rise. To combat this an entirely different difficulty adjustment algorithm was proposed as part of the EIP 2. Ethereum Improvement Proposals, or EIPs, are the Ethereum equivalent of Requests-for-Comments (RFCs): they are proposed standards for features and enhancements to the Ethereum ecosystem. The EIP official website contains a list of all EIPs and their current states. EIP 2 contained four distinct sections, each addressing an issue with Ethereum. The fourth section (referenced herein as EIP2/4) is the focus of the article: changing Ethereums difficulty adjustment algorithm. block_diff = parent_diff + parent_diff // 2048 * max(1 - (block_timestamp - parent_timestamp) // 10, -99) + Note: the // operator refers to simple division (ex. 6 // 2 == 3 ) The formula above may seem daunting but the logic can be broken down as follows: If the block is solved in less than 10 seconds, increase the difficulty If the block is solved in more than 20 seconds, decrease the difficulty If the bloc Continue reading >>

What Is Ethereum's

What Is Ethereum's "difficulty Bomb"?

Ethereums Difficulty Bomb refers to the increasing difficulty level of puzzles in the mining algorithm used to reward miners with ether on its blockchain. As the puzzles become more complex (and miners find it more difficult to earn ether), there will be a substantial lag between production of blocks on ethereums blockchain. This will slow it down in exponential terms and its economics will become less attractive to miners. The onset of this scenario is referred to as Ethereums Ice Age. During this time, ethereum will transition from Proof of Work (PoW), which requires miners to earn ether by competing against each other to solve puzzles and earn rewards, to Proof of Stake (PoS), where rewards are distributed on the basis of staking or coin ownership. The switch between protocols will occur later this year as part of the Casper update on ethereum. The difficulty bomb will prevent forking of ethereums blockchain during that time. Ethereums difficulty bomb is a deterrent for miners, who may opt to continue with PoW even after the blockchain transitions to PoS. Their primary reason for doing so may be the shift in balance of power and profits away from miners into the hands of investors and users of the blockchain. If all miners do not make the switch to Proof of Stake, then there is the danger that ethereums blockchain might fork. A similar situation occurred in 2017, when bitcoin miners forced a fork in its blockchain by throwing their weight behind bitcoin cash. (See also: Bitcoin Vs. Bitcoin Cash: What's The Difference? ) Ethereums founders, however, foresaw such an eventuality and programmed its blockchain to incorporate increases in difficulty levels for its mining algorithm. Difficulty levels on ethereums blockchain began increasing in November 2016, from block 200 Continue reading >>

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