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How Ethereum Mining Works

Introduction | Ethereum Frontier Guide

Introduction | Ethereum Frontier Guide

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 gonna 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 o Continue reading >>

Ethereum (ether) Mining

Ethereum (ether) Mining

Blocks are generated on average every 12 seconds. The block reward is 5 ETH. Genesis Mining is the largest Ether cloud mining provider. Ethereum cloud mining contracts are available for purchase and the prices are as follows: You can also read this cloud mining guide to learn how to mine Ether using Amazons cloud servers. As with any cryptocurrency, Ethereum mining profitability depends on many factors. The hash rate of your miners in relation to the total network hash rate will determine your share of earnings. Your earnings can also vary depending on Ethers price relative to fiat currencies like the US dollar. More efficient mining hardware will also increase profitability. The more efficient your hardware can convert electricity to Ether, the higher your profit margins. An Ethereum mining profitability calculator can be used to determine a rough estimate of your earnings based on your hash rate, the network hash rate, block time, and the price of one ETH. Two examples of calculators can be found at EtherScan and Badmofo . Although Ethereum has only recently gained popularity, there are already a few Ethereum mining pools. The two most popular pools are: Continue reading >>

How Does Cryptocurrency Mining Work? And What Is Cryptocurrencies Hashrate?

How Does Cryptocurrency Mining Work? And What Is Cryptocurrencies Hashrate?

how does cryptocurrency mining work and what is cryptocurrencies hashrate How Does Cryptocurrency Mining Work? And What is Cryptocurrencies Hashrate? Until now, while there are investors who have a clear understanding of the process and the mechanics behind it, many are highly exposed to the nuances of mining and with current valuations, are certainly susceptible to sizeable losses, June’s Ethereum flash crash and increased volatility a reminder that as an investor, it’s not just following the masses, but far more. Last year’s Ethereum blockchain split was an event that could have resulted in significant loss and with the 1st August Bitcoin Fork event just around the corner, a greater knowledge of the process and the risks is certainly relevant as cryptocurrency demand continues to build. While many have looked at simply trading cryptocurrencies such as Bitcoin , others have gone into the mining, which is the process through which coins are created. For want to be miners, appropriate hardware and access to the internet is needed for an investor to mine, the actual process being the compilation of recent transactions into blocks in order to solve complex puzzles. The person who solves the puzzle first is permitted to place the next block on the blockchain and reap the rewards, which include transaction fees associated with the transactions carried out in the block, together with a newly released coin, the amount of which is referred to as the block reward. The difficulty in mining is adjustable and is adjusted every 2016 blocks, equivalent to around every 2-weeks, with the adjustment made to ensure that the block rate discovery remains constant, the difficulty is therefore adjusted to the computational power used for mining. It’s a word that many would have hear 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 >>

How Mining Works On Private Ethereum Blockchain Networks? [closed]

How Mining Works On Private Ethereum Blockchain Networks? [closed]

I'm a little bit confused about how the process of mining works on private ethereum blockchains. I know that in public networks the mining processes is distributed among aleatory miners. But in private networks, should I choose the users who's gonna mine? closed as too broad by Kara , Matt , www , J David Smith , Eugene Lisitsky Nov 9 '17 at 20:05 Please edit the question to limit it to a specific problem with enough detail to identify an adequate answer. Avoid asking multiple distinct questions at once. See the How to Ask page for help clarifying this question. If this question can be reworded to fit the rules in the help center , please edit the question . bitcoin.stackexchange.com Alexan Nov 9 '17 at 19:33 I'm voting to close this question as off-topic because better to ask at ethereum.stackexchange.com Eugene Lisitsky Nov 9 '17 at 20:05 Short answer: You control the miners on your own private network. Generally speaking, private networks are implemented specifically to isolate your environment. This could be due to wanting to secure your data from the public network or simply because you want to have an environment for dev/QA. Therefore, you wouldn't want any unknown miners attached to your private network. One use case that may cause you to want expose your network to other entities would be if you were creating a consortium that others could join. Something like sellers joining an Amazon private network in order to handle fulfillment. Even in this case, the miners on the network would be setup in a way similar to traditional private networks today where access is strictly controlled by the owner of the network (with firewalls, etc). If you're interested in setting up your own private network, the Geth documentation has a pretty good write up. 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 To Mine Ethereum On Your Pc

How To Mine Ethereum On Your Pc

Hoover up some Ether using your home computer The cryptocurrency revolution is largely down to enthusiastic 'miners', who build or use their own machines to perform the complex proof of work algorithms to process data blocks, creating more of their chosen currency such as Bitcoin and Ethereum. Specialized mining equipment is available online and you can even rent processing power from companies such as Genesis Mining (weve got a guide on how to do this here ). However, if your home computer is powerful enough there's no reason you can't get started mining Ethereum today. In this guide, you'll learn how to use the friendly MinerGate client. This handy program quickly and easily connects you to MinerGate's mining pool from where you can share some of your machines resources, and then subsequently share in the rewards of generating Ether. Before you begin, remember that the actual amount of hard cash you'll make from doing this will vary depending on the mining difficulty, the fluctuating price of Ether and how powerful your hardware is. MinerGate has a built-in benchmarking tool to give you a rough idea how much you stand to make per year, although this doesn't take into account the electricity used by your machine. Open your browser and navigate to . Click on the button marked Download Miner & Start Mining. If you're using Microsoft Edge, you can click Run to launch the installer at this stage. Windows 10 will ask you to confirm that you wish to allow MinerGate to make changes to your system. Click Yes. Setup will now launch. Close down any other open apps and agree to the license agreement. On the next screen (Install Options), select Add MinerGate to the system PATH for current user as well as Create MinerGate Desktop Icon. Click Next, then Install. Once MinerGate has Continue reading >>

The Simpler Guide To Ethereum

The Simpler Guide To Ethereum

Ethereum is an open source Blockchain network that allows developers to build decentralized applications on the platform. Ethereum has similarities to Bitcoin in that they are both decentralized crypto-currencies and digital assets. Ethereum differs from Bitcoin in its end-use goal. Bitcoin aims to be the worlds currency and to facilitate transactions between individuals without the need for a third-party to confirm the transactions. Ethereum aims to be the worlds largest computer network that allows developers to build decentralized applications that are all powered and confirmed by the underlying Blockchain or network, without the need for a traditional third-party such as a bank. If the goal of Bitcoin was to become the worlds currency, then the goal of Ethereum is to become the worlds most interconnected, yet decentralized, computer. A simplified description of how Ethereum works is to compare it to the operating system that powers the iPhone, iOS. We all have one of these devices in our pockets and know that there are many types of apps that can be installed on an iPhone. The developers for these apps can create a wide variety of uses from Maps to Music to Shopping, all separate apps, that all work together by integrating in to the iOS on the iPhone. Ethereum intends to work in the same way as this iOS backbone. To provide a network where developers can create decentralized applications that can speak to each other without the need for a third party to establish trust or a centralized system of control over individuals. The Blockchain is the technology that Ethereum and most other cryptocurrencies are built on. The Blockchain works as the backbone of Ethereum network and allows users from all over the world to share a common ledger on which to record transactions. Continue reading >>

When Will Ethereum Mining End?

When Will Ethereum Mining End?

In August of this year (2017), Vitalik Buterin, creator of Ethereum , released the implementation guide for the first version of Casper. As a hybrid proof-of-stake (PoS)/proof-of-work (PoW) algorithm, Casper v1 is going to decrease (and eventually end) the profitability for Ethereum miners . The release date is estimated to be sometime in 2018 as part of the Constantinople hard fork and theres a lot to learn before this happens: Casper is a PoS algorithm thats projected to be released on the Ethereum network sometime in 2018. Beginning as a hybrid with the current PoW algorithm, the first version of Casper will only use a PoS consensus to validate every 100th block, called checkpoints. Once a checkpoint is validated, theres no way to go back and use a chain without it. Even if 99% of miners support a chain that doesnt include a checkpoint block, all clients in the network will still continue to use the one with the checkpoints. This removes a lot of the power that miners currently have. The Ethereum community hypothesizes that the switch to PoS will help with the scaling issues that the network is currently facing. The algorithm should enable new blocks to be created more quickly while allowing the network to scale more efficiently through sharding. Sharding is a horizontal partitioning of a large database into smaller and more easily managed parts. Beyond that, PoS algorithms also use less energy to run the network, reduce centralization, and make 51% attacks more difficult. With the upcoming hard fork, there could potentially be three forks of Ethereum: And, if youre a miner, you may be thinking, No big deal, Ill just continue to mine and give support to the Ethereum PoW fork. The Ethereum developers have stated that theyll be releasing what they call the difficulty Continue reading >>

How To Mine Ethereum

How To Mine Ethereum "the Easy Way" - An Ethereum Mining Contract?

How to mine Ethereum "the Easy Way" - an Ethereum Mining Contract? How to mine Ethereum "the Easy Way" - an Ethereum Mining Contract? Ethereum is quite difficult to mine on your standard PC as there are quite a few step to go through as can be seen in our comprehensive guide here . If you aren't tech savvy or willing to give a bit of time to getting it up and running yourself, thereis another way. This is where you pay someone else to do it for you and get them to run the mining equipment on your behalf. You can compare all Bitcoin and Ethereum cloud mining contracts here . You can buy your first cloud mining contract with Genesis Mining here . This is called cloud mining. It has been happening for a long time with Bitcoin and a number of reputable providers have come to the fore where you can trust their reputation for them not to run off with your money. This is especially true of Genesis Mining who are the first to set up a batch of Ethereum Mining contracts where all you do is pay them some cash and your up and running as an Ethereum miner - as simple as that - no hassle no playing around with downloading Geth and using command prompt - and most importantly you don't have to maintain it yourself which can be a big issue if you have to keep going to restart your computer. So it saves your time! The reason Ethereum Cloud miners can get better deals is two fold. Firstly they buy in bulk, so they get a discount on all their graphics cards. Secondly they can put their mining machines in low cost locations such as Iceland. This severely reduces the operating costs of running an ethereum mining contract which means they can pass on these savings to you. In fact Genesis mining run their contracts off green energy - so you can say your being green whilst being in the avant- Continue reading >>

A Gentle Introduction To Ethereum

A Gentle Introduction To Ethereum

Ethereum builds on blockchain and cryptocurrency concepts, so if you are not familiar with these, its worth reading a gentle introduction to bitcoin and a gentle introduction to blockchain technology first. This article assumes the reader has a basic familiarity with how Bitcoin works. Ethereum is software running on a network of computers that ensures that data and small computer programs called smart contracts are replicated and processed on all the computers on the network, without a central coordinator. The vision is to create an unstoppable censorship-resistant self-sustaining decentralised world computer. The officialwebsite is Itextends the blockchain concepts from Bitcoin which validates, stores, and replicates transaction data on many computers around the world (hence the term distributed ledger). Ethereum takes this one step further, and also runs computer code equivalently on many computers around the world. What Bitcoin does for distributed data storage, Ethereum does for distributed data storage plus computations. The small computer programsbeing run are called smart contracts, and the contractsare run by participants on their machines using asort ofoperating system called a Ethereum Virtual Machine. To run Ethereum, you can download (or write yourself if you have the patience) some software called an Ethereum client. Just like BitTorrent or Bitcoin, the Ethereum client will connect over the internet to other peoples computers running similar client softwareand start downloading the Ethereum blockchain from them to catch up. It will also independently validate that each block conforms to the Ethereum rules. What does the Ethereum client software do? You can use itto: Create new transactions and smart contracts Your computer becomes a node on the network, r Continue reading >>

What Is Ether?

What Is Ether?

Ether is a necessary element a fuel for operating the distributed application platform Ethereum. It is a form of payment made by the clients of the platform to the machines executing the requested operations. To put it another way, ether is the incentive ensuring that developers write quality applications (wasteful code costs more), and that the network remains healthy (people are compensated for their contributed resources). If you just want to test the technology, you probably don't need real ether. Download the latest Wallet app and switch to the Test Network Check your ether presale balance safely here: The total supply of ether and its rate of issuance was decided by the donations gathered on the 2014 presale. The results were roughly: 60 million ether created to contributors of the presale 12 Million (20% of the above) were created to the development fund, most of it going to early contributors and developers and the remaining to the Ethereum Foundation 5 ethers are created every block (roughly 15 seconds) to the miner of the block 2-3 ethers are sometimes sent to another miner if they were also able to find a solution but his block wasn't included (called uncle/aunt reward) Note that after the Byzantium update is implemented, the mining and uncle reward is reduced to 3 ethers and 0.625-2.625 ethers, respectively. No. According to the terms agreed by all parties on the 2014 presale, issuance of ether is capped at 18 million ether per year (this number equals 25% of the initial supply). This means that while the absolute issuance is fixed, the relative inflation is decreased every year. In theory if this issuance was kept indefinitely then at some point the rate of new tokens created every year would reach the average amount lost yearly (by misuse, accidental key 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 >>

Ethereum - Wikipedia

Ethereum - Wikipedia

This article has multiple issues. Please help improve it or discuss these issues on the talk page . This article relies too much on references to primary sources . Please improve this by adding secondary or tertiary sources . Some of this article's listed sources may not be reliable . Please help this article by looking for better, more reliable sources. Unreliable citations may be challenged or deleted. The Ethereum Project's logo, first used in 2014 Ethereum is an open-source , public, blockchain -based distributed computing platform featuring smart contract (scripting) functionality. [2] It provides a decentralized Turing-complete virtual machine , the Ethereum Virtual Machine (EVM), which can execute scripts using an international network of public nodes. Ethereum also provides a cryptocurrency token called "ether", which can be transferred between accounts and used to compensate participant nodes for computations performed. [3] "Gas", an internal transaction pricing mechanism, is used to mitigate spam and allocate resources on the network. [2] [4] Ethereum was proposed in late 2013 by Vitalik Buterin , a cryptocurrency researcher and programmer. Development was funded by an online crowdsale between July and August 2014. [5] The system went live on 30 July 2015, with 11.9 million coins "premined" for the crowdsale. [6] This accounts for approximately 13 percent of the total circulating supply. In 2016, as a result of the collapse of The DAO project, Ethereum was forked into two separate blockchains - the new forked version became Ethereum (ETH), and the original continued as Ethereum Classic (ETC). [7] [8] [9] Ethereum was initially described in a white paper by Vitalik Buterin , [10] a programmer involved with Bitcoin Magazine , in late 2013 with a goal of buildin Continue reading >>

How Cryptocurrency Mining Works Explains Why Amd And Nvidia's Sales To Miners Might Soon Fall

How Cryptocurrency Mining Works Explains Why Amd And Nvidia's Sales To Miners Might Soon Fall

How Cryptocurrency Mining Works Explains Why AMD and Nvidia's Sales to Miners Might Soon Fall As Ether prices fall and mining it has gotten harder, some miners are calling it quits. AMD Inc.'s ( AMD ) strong second-quarter earnings report provided additional evidence that Ethereum mining activity has provided a major boost to global GPU sales. But there are already signs that the craze is waning, and that AMD was quite justified in taking a cautious approach to forecasting its mining-related sales for the coming months. "Miners" of cryptocurrencies such as Bitcoin, Litecoin and Ether -- the currency linked to the technology known as Ethereum -- verify new transactions involving a given blockchain technology, often while as part of a "pool" of miners that jointly process transactions. The verification process requires performing some complex, computationally-demanding math, and the processing power needed keeps growing as more transactions are verified and more miners join the fray. And assuming one is keeping a mining "rig" running much or all of the day, it's bound to run up a large electricity bill. Bitcoin Cash Begins Trading Tuesday; It's a Crucial Moment: Market Recon After a transaction has been verified, it gets added to a blockchain -- that is, a secure, distributed, transaction ledger featuring a long set of connected digital "blocks." In return for their work, miners are paid a small transaction fee from the parties requesting verification -- offering a larger fee guarantees miners will verify it quickly -- and are given a tiny portion of the new digital "coins" that are issued each day for a particular cryptocurrency. In the case of Ether, about 36,000 new coins (current value of $7.1 million) are issued each day for miners to compete over. Unlike Bitcoin, Continue reading >>

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