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Ethereum Mining Difficulty Explained

Bitcoin Mining Difficulty Explained Simply

Bitcoin Mining Difficulty Explained Simply

Bitcoin Mining Difficulty Explained Simply The Bitcoin difficulty level recently increased by 7.09% recently. What is difficulty level and why is is important? Here theBitcoin mining difficulty explained so simply even kids can understand once they read this. Bitcoin is probably the first decentralized, distributed open source digital currency protocol to gain massive adoption. No sooner the concept of digital currency was introduced by Satoshi Nakamoto in his whitepaper, it garnered a lot of interest from computer scientists and cryptographers. Some of these people had already tried creating a digital currency system with limited success. But Bitcoin offered a solution to many problems that were faced by the researchers until then. These very solutions were the reason for Bitcoin to become one of the widely adopted digital currencies in the world till date. The main intention behind the creation of Bitcoin was to empower individuals by providing them with an alternative way to conduct peer to peer transaction over the internet without having to go through the middle men or a trusted third party like banking and financial institution. In order to fulfill its purpose, the digital currency protocol has to meetcertain criteria. Apart from being scarce, fungible and highly divisible, it is important for bitcoin network to maintain consistency. Consistency of the network takes a special place because of its distributed nature. We all know that Bitcoin is an open source, decentralized digital currency where the miners, who are part of the Bitcoin community contribute processing power to discover new blocks and confirm transactions over the network. This is done by comparing the transaction ids with the existing record on the blockchain and inserting the new transaction recor Continue reading >>

Difficulty - Bitcoin Wiki

Difficulty - Bitcoin Wiki

Difficulty is a measure of how difficult it is to find a hash below a given target. The Bitcoin network has a global block difficulty. Valid blocks must have a hash below this target.Mining pools also have a pool-specific share difficulty setting a lower limit for shares. How often does the network difficulty change? difficulty = difficulty_1_target / current_target difficulty_1_target can be different for various ways to measure difficulty.Traditionally, it represents a hash where the leading 32 bits are zero and the rest are one (this is known as "pool difficulty" or "pdiff").The Bitcoin protocol represents targets as a custom floating point type with limited precision; as a result, Bitcoin clients often approximate difficulty based on this (this is known as "bdiff"). Each block stores a packed representation (called "Bits") for its actual hexadecimal target . The target can be derived from it via a predefined formula. For example, if the packed target in the block is 0x1b0404cb, the hexadecimal target is 0x0404cb * 2**(8*(0x1b - 3)) = 0x00000000000404CB000000000000000000000000000000000000000000000000 Note that the 0x0404cb value is a signed value in this format. The largest legal value for this field is 0x7fffff. To make a larger value you must shift it down one full byte. Also 0x008000 is the smallest positive valid value. How is difficulty calculated? What is the difference between bdiff and pdiff? The highest possible target (difficulty 1) is defined as 0x1d00ffff, which gives us a hex target of 0x00ffff * 2**(8*(0x1d - 3)) = 0x00000000FFFF0000000000000000000000000000000000000000000000000000 It should be noted that pooled mining often uses non-truncated targets, which puts "pool difficulty 1" at 0x00000000FFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFF S Continue reading >>

Eth Difficulty Bomb Today

Eth Difficulty Bomb Today

ttps://steemit.com/ethereum/@joshbreslauer/ethereum-metropolis-upgrade-in-late-september In addition, the so-called Difficulty-Bomb is actually delayed and will be part of the 2nd Hardfork of Metropolis. The Difficulty Bomb should cause an expanding difficulty in ethereum's mining. It is an intermediate step for the gradual replacement from proof-of-work to proof-of-stake. This is the so called Ethereum "Ice Age". But for the next Metropolis HF in September 2017 this should be delayed to the 2nd part and replaced by a simple Block Reward reducement from 5 to 3 ether per block. For those of you wondering what the real world impact of these bombs going off is, they are significantly increasing the amount of time it takes to mine blocks. Before one of the first bombs went off in mid May, it took on average about 14.5 secs to mine one block which contained 5 ETH. If you look at this chart you can see the exact times each subsequent bomb has gone off to the point we are at now were it is taking about 21 secs to mine 1 block of ETH. With the current implementation of Ice Age, this is what block times will look like over the coming bomb drops: 100% anonymous! Guard your Privacy! Subscribe YouTube Reddit Telegram ONION on NovaExchange "This isn't the kind of software where we can leave so many unresolved bugs that we need a tracker for them." -- Satoshi Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here. ttps://steemit.com/ethereum/@joshbreslauer/ethereum-metropolis-upgrade-in-late-september In addition, the so-called Difficulty-Bomb is actually delayed and will be part of the 2nd Hardfork of Metropolis. The Difficulty Bomb should cause an expanding difficulty in ethereum's mining. It is an Continue reading >>

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 >>

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 >>

How Ethereum Mining Works

How Ethereum Mining Works

Today, miners play an important role in making sure ethereum works. This role isn't immediately obvious, though. Many new users think that the sole purpose of mining is to generate ethers in a way that doesn't require a central issuer (seeour guide" What is Ether? "). This is true. Ethereum's tokens are created through the process of mining at a rate of 5 ether per mined block. But mining also has another at least asimportant role. Usually, banks are in charge of keeping accurate records of transactions. They ensure that money isn't created out of thin air, and that users don't cheat and spend their money more than once. Blockchains, though, introduce an entirely new way of record-keeping, one where the entire network, rather than an intermediary, verifies transactions and adds them to the public ledger. Although a 'trustless' or 'trust-minimizing' monetary system is the goal, someone still needs to securethe financial records, ensuring that no one cheats. Mining is one innovation that makes decentralized record-keeping possible. Miners come to consensus about the transaction history while preventing fraud (notably the double spending of ethers) an interesting problem that hadnt been solved in decentralized currencies before proof-of-work blockchains. Although ethereum is looking into other methods of coming to consensus about the validity of transactions, mining currently holds the platform together. Today, ethereum's mining process is almost the same as bitcoins . For each block of transactions, miners use computers to repeatedly and very quickly guess answers to a puzzle until one of them wins. More specifically, the miners will run the blocks unique header metadata (including timestamp and software version) through a hash function (which will return a fixed-length, Continue reading >>

Bitcoin Mining Difficulty Explained

Bitcoin Mining Difficulty Explained

We keep talking about the bitcoin mining difficulty but what the hell does it actually mean? How is it determined and how does it impact your ability to mine that sweet sweet bitcoin? All great questions and hopefully the answers are below. Mining difficulty refers to how hard it is to actually solve a hash and release a block of bitcoin. Currently each block contains 12.5 bitcoins. When a block is solved, 12.5 new bitcoin are released to the wild. The mining difficulty across the bitcoin network is adjusted at set points to ensure that a steady stream of bitcoin is being released to the world. When is bitcoin mining difficulty adjusted? The mining difficulty is adjusted automatically each time 2016 blocks are solved. The goal is to keep the block solution time to about 10 minutes from the global hashing rate. Roughly every 10 minutes 12.5 new bitcoin are released and can be bought or sold. This ensures that a steady supply of bitcoin are released until the overall supply of bitcoin that can be created is exhausted. 21 million is the number. No more, no less. The bitcoin mining difficulty is adjusted about every two weeks. It was adjusted last night and is predicted to adjust again around two weeks from now. Absolutely. This is the easiest way to think about it. Essentially, the more mining that is occurring. The more hash rate there is globally, the faster the bitcoin will be mined. In turn, the higher the difficulty will adjust in order to keep to the 10 minute block goal. Conversely, when total hash rate goes down, bitcoin mining is slower and the difficulty would adjust lower to again, keep to the 10 minute block goal. Let us use some simple math for a minute just to get an idea of how this impacts your mining. Lets say for the sake of argument that 1 bitcoin equal Continue reading >>

Explain It Like I'm Five - Bitcoin Mining Difficulty Level | Newsbtc

Explain It Like I'm Five - Bitcoin Mining Difficulty Level | Newsbtc

The Bitcoin difficulty level recently increased by 7.09% recently. What is difficulty level and why is is important? Bitcoin is probably the first decentralized, distributed open source digital currency protocol to gain massive adoption. No sooner the concept of digital currency was introduced by Satoshi Nakamoto in his whitepaper, it garnered a lot of interest from computer scientists and cryptographers. Some of these people had already tried creating a digital currency system with limited success. But Bitcoin offered a solution to many problems that were faced by the researchers until then. These very solutions were the reason for Bitcoin to become one of the widely adopted digital currencies in the world till date. The main intention behind the creation of Bitcoin was to empower individuals by providing them with an alternative way to conduct peer to peer transaction over the internet without having to go through the middle men or a trusted third party like banking and financial institution. In order to fulfill its purpose, the digital currency protocol has to meetcertain criteria. Apart from being scarce, fungible and highly divisible, it is important for bitcoin network to maintain consistency. Consistency of the network takes a special place because of its distributed nature. We all know that Bitcoin is an open source, decentralized digital currency where the miners, who are part of the Bitcoin community contribute processing power to discover new blocks and confirm transactions over the network. This is done by comparing the transaction ids with the existing record on the blockchain and inserting the new transaction records into fresh blocks. Technically, the time taken by a miner or a mining pool to discover a new block is directly proportional to the total pro Continue reading >>

Ethereum Mining 101: Your Complete Guide

Ethereum Mining 101: Your Complete Guide

The world has gone digital, from the development of smart homes to the development of innovations that promote seamless transactions. Every industry is feeling the impact of technology now more than ever. In every part of the world, the technologically driven goals remain the same: the maximization of profit and the promotion of sustainable development in all spheres of life. It is this yearning to make life as easy as possible that brought about the birth of cryptocurrency . Ethereum seeks to make these aspirations come true. The platform boasts of several applications that help users carry out everyday tasks in a simple fashion. What is Mining, Ethereum Mining and Where Does Ether Come From? Mining is a computationally intensive work that requires a lot of processing power and time. Mining is the act of participating in a given peer distributed cryptocurrency network in consensus. The miner is subsequently rewarded for providing solutions to challenging math problems. It is done by putting the computer's hardware to use with mining applications. All the information on cryptocurrency transactions must be embedded in data blocks. Each block is linked internally to several other blocks. This creates the blockchain . These blocks must be analyzed as fast as possible to ensure a smooth running of transactions on the platform. However, the issuers of such currencies do not have the processing capabilities to handle this alone. It is where miners come in. A miner is an investor that devotes time, computer space and energy to sorting through blocks. When the mining process hits the right harsh, they will submit their solutions to the issuer. After verification, the issuer of the currency offers rewards which are portions of the transactions they helped in verifying. They als Continue reading >>

Mining Difficulty And Network Hashrate Explained | 2miners Blog

Mining Difficulty And Network Hashrate Explained | 2miners Blog

Mining Difficulty and Network Hashrate Explained Let's try to understand what network difficulty and hashrate are. I'm in Crypto World, literally, for three months. I'm still not going to claim that I have a super knowledge. It was challenging for me to understand the principles of the cryptocurrency networks, so I decided to share my perspective on them. There are a lot of chats out there on the subject of cryptocurrency mining and trading. A typical question for any newbie would be something like, "which ASIC to buy or which mining rig to build," and the response is: "Take a look at the growing difficulty of the network and don't even think about getting into this business!" Lets have a look at the hashrate and difficulty of a Musicoin blockchain (similar to Ethereum, same as a Dagger Hashimoto algorithm). The values are smaller than you think, so I hope it will be easier for you to understand the idea this way. Each cryptocurrency network has a block time parameter. In Musicoin the block time is 15 seconds. Lets assume that all miners around the world are solving a big puzzle. Each piece is called a block. A musicoin block is found every 15 seconds in an ideal world. But this is not the case, so sometimes it could be 1 second or even 1 minute. However, the average block time is 15 seconds. How is this parameter being held regardless of the number of miners that connect to the network? It is evident that if there are lots of miners, they should find blocks frequently (here is an example of an empty block at UBIQ ), and if there are only a few miners, the blocks will be rare, and the network transactions will take a very long time. Currently, a miner or Mining Pool (many miners working together) receive 309 Musicoin coins ($13) for one solved Musicoin block. In the Et Continue reading >>

What Is The Ethereum Difficulty Bomb?

What Is The Ethereum Difficulty Bomb?

Over the past few months, there has been a lot of speculation regarding Ethereums mining difficulty. This problem is known as the Difficult Bomb, and it poses a significant threat to the ecosystem. Or that is what most people think will happen if things ever come to such a point. Switching to proof-of-stake should make this a non-issue, though. Now is a good time to look at Ethereums difficulty bomb and what it could potentially mean for the network if left unchallenged. The Ethereum Difficulty Bomb Makes Mining Impossible It is important to understand the problem of the Ethereum difficulty bomb first and foremost. When Ethereum was first created, the developers had to create a consensus algorithm. Similar to Bitcoin, this consensus is achieved through mining in a proof-of-work environment. However, with the mining difficult going up over time, it could potentially create a problematic scenario. After all, it does not appear there will be ASIC-like mining hardware for Ethereum anytime soon. However, the Ethereum developers have come up with a different plan. From the outset, the plan was to make Ethereum mining impossible at some point in the future. This change will be introduced through an arbitrarily difficult block to mine, which will effectively create the difficulty bomb in question. As this difficulty bomb is activated on the network, the mining difficulty will skyrocket and eventually make Ethereum mining unfeasible and extremely unprofitable. Some people would expect this to be the end of Ethereum, but there is no reason to panic just yet. The goal is to switch over to a proof-of-stake algorithm before the Ethereum difficulty bomb can even become a problem. Right now, that PoS algorithm is still in development, albeit its completion appears to be imminent. Do Continue reading >>

Ethereum Hashrate And Mining Difficulty Explained

Ethereum Hashrate And Mining Difficulty Explained

Ethereum Hashrate and Mining Difficulty Explained Ethereum (ETH) is going par to par with Bitcoin and that is why it has been facing an increasing interest. It currently has a market cap of US $79.2 billion and currently has a trading volume of US $3.18 billion as per the last 24 hours. Hash: Mathematical problem that miners solve. In the case of Ethereum the mathematical problem is verifying transactions on the blockchain. So you can see here about 24% of Ethereum coins are set aside as a block reward for miners . The hashrate is the calculation of how fast your mining is solving these mathematical problems. The higher the hashrate the faster the miner is solving these problems. It is not only the hashrate that determines the profitability rate. Even though the hash rate is important, the power consumption ratio is equally important. It is therefore important to check the hashrate/power consumption ratio to make sure that there is a balance. It should not be in such a way that there is a low hash rate and a high power consumption as that will mean more losses in terms of electricity costs. Normally Ethereum hashrate is measured in hashes per second. A typical Ethereum miner has a hashrate is 46 MH/s which is basically 4600 hashes per second. Mining difficulty:Measurement of how difficult it is to solve the mathematical problem. To improve the network, Ethereum plans to move from Proof of Work (PoW) to Proof of stake (PoS). Proof of Work is what is currently used, work being solving hashes. Proof of work is whereby the computer decides who to award according to the kind of work that they have done. On the other hand, proof of stake is whereby one is awarded depending on the Ethereum shares they have. With proof of stake, you can just buy Ethereum like a normal ICO then Continue reading >>

It Is No Longer Worth It To Build An Ethereum Mining Rig

It Is No Longer Worth It To Build An Ethereum Mining Rig

It Is No Longer Worth It To Build An Ethereum Mining Rig Building an Ethereum mining rig hasnt been worth it for months, and soon they will be completely obsolete. Goodnight, sweet prince. Image: Daniel Oberhaus/Motherboard Back in May I wrote a guide explaining how to build an Ethereum mining rig , a special type of computer that forms the backbone of the Ethereum network and earns ether, the digital currency native to the network, for its owner. Shortly thereafter, Motherboard also made a video documenting this process . Since then, Ive received countless emails from readers inquiring about my mining rig. Ive received three such emails this week. The most common question voiced by these readers is whether or not it is still worth it to build a mining rig. The answer to this question is no. Building an Ethereum mining rig hasnt been worth it for months and a few months from now, mining ether will be completely obsolete. Read More: An Idiot's Guide to Building an Ethereum Mining Rig Arguably, building an Ethereum mining rig wasnt even worth it when I built my machine in May, and many readers let me know this when the article and video first came out. This is somewhat true, but there is a necessary caveat here. Mining ether also wasnt worth it for about the first year and a half of the cryptocurrencys existence. The price of ether hovered around $10 from 2015 until early 2017, when it saw a spike to $25. This was important because it meant the value of the ether being mined was higher than the cost of the electricity that was needed to mine it. In other words, until that point small scale mines were operating at a loss in the belief that the tokens they were mining would someday be worth a lot more money. In hindsight, these early miners were rightthe price of ether has Continue reading >>

How Is The Mining Difficulty Calculated On Ethereum?

How Is The Mining Difficulty Calculated On Ethereum?

Having read various pieces of documentation, it's still not completely clear to me what dictates the difficulty rise, and how Ethereum difficulty levels differ to Bitcoin. In the past week difficulty has jumped from around 11 to over 17, whilst GH/s has fluctuated between 800.00 - 1400.00 but with no clear correlation between the two. Has the "difficulty bomb" now been introduced? And if yes, is there any way for approximating or calculating how much difficulty will likely rise by in the next 6-12 months? Related: If Serenity / PoS is unlikely to be introduced until early next year, has there been any suggestion from the dev team that the effects of this "difficulty bomb" will be reduced in either the homestead or metropolis releases? From : Mining difficulty is calculated from the time difference between blocks. The exact formula will change in Homestead. The symbol // in the following denotes integer division. block_diff = parent_diff + parent_diff // 2048 * (1 if block_timestamp - parent_timestamp < 13 else -1) + int(2**((block.number // 100000) - 2)) block_diff = parent_diff + parent_diff // 2048 * max(1 - (block_timestamp - parent_timestamp) // 10, -99) + int(2**((block.number // 100000) - 2)) The problem with the frontier formula and the reason for the change was that the frontier version doesn't take into account how far off from 13 seconds the block time was. A block mined 1 second after the previous one has the same effect on the difficulty as one mined after 12 seconds. This causes block difficulty to adjust to a median block time rather than a mean. Again, check out the EIP for more details. Apologies that I lack the the knowledge but how exactly would I use this to calculate? Seeing the difference "< 13 else -1" vs "// 10, -99" it's not clear to me what the Continue reading >>

What Is The Ethereum Ice Age?

What Is The Ethereum Ice Age?

Ethereum is currently a Proof of Work cryptocurrency, meaning that computational power is needed, not only to produce new coinsbut to process transactions and to keep the entire ecosystem moving. In order to ensure the system is scalable and decentralized, Ethereum plans to move to a Proof of Stake protocol where a lot lesscomputational power is required and miners can earn rewards according to their balance. The Ethereum Foundation is still working on the Proof of Stake protocol, Casper. Since Casper is not finished and it's not contained in the release version of Ethereum a hard-fork might be required to implement this change. An hard-fork creates an incompatibility between the previous version and the latest, there is always the possibility to create a "split" that result in two blockchains, like Ethereum Classic , did on the 1920000th block, after the hard-fork to refund The DAO token holders took place . In order to ensure such event doesn't take place (although it did already) and to give themselves a time-frame to finish Casper (making the community aware of the introduction of a hard fork within that time-frame), a Difficulty Time Bomb, is also known as Ice Age was implemented in Ethereum. The Ethereum Ice Age is a difficulty adjustment scheme that was put in place to ensure that everyone has an incentive to move to the new blockchain once the hard-fork is implemented. It was introduced on the 7th of September (2015-09-07), about 11 months ago and it's programmed to raise difficulty exponentially. It's impossible for miners to keep up with the increase of difficulty which would raise block time and it would make the blockchain freeze, hencethe name Ice Age. The key part is the calculation for the increase in difficulty is Math.pow(2,Math.floor(block.number / 10 Continue reading >>

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