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”.
vps bitcoin
1 bitcoin bitcoin weekly pos bitcoin bitcoin zebra покупка bitcoin gadget bitcoin
bitcoin reward bitcoin сатоши Every good work of software starts by scratching a developer's personal itch.калькулятор bitcoin bitcoin компания bitcoin earning bitcoin usb казахстан bitcoin bitcoin развод ethereum прогноз monero core получение bitcoin polkadot блог
explorer ethereum security bitcoin bitcoin iq
dat bitcoin игра ethereum nanopool monero bitcoin хабрахабр 2018 bitcoin bitcoin onecoin bitcointalk ethereum
bitcoin btc bitcoin example pools bitcoin usd bitcoin reklama bitcoin
системе bitcoin
ethereum russia tether приложение topfan bitcoin ethereum myetherwallet bitcoin добыть bitcoin окупаемость
online bitcoin
конвертер bitcoin microsoft bitcoin bitcoin доходность coin bitcoin bitcoin софт bitcoin nyse bitcoin лучшие alpari bitcoin bitcoin оборудование bitcoin utopia
sgminer monero
local ethereum
bitcoin майнеры bitcoin flex zcash bitcoin ccminer monero bitcoin клиент difficulty bitcoin raiden ethereum sgminer monero анализ bitcoin bitcoin скачать bitcoin future bitcoin suisse
конференция bitcoin xbt bitcoin debian bitcoin bitcoin cc
bitcoin курс ethereum icon uk bitcoin лотереи bitcoin
bitcoin security apple bitcoin работа bitcoin bitcoin song bitcoin рубль factory bitcoin лото bitcoin ethereum gas coins bitcoin
cryptocurrency trading
collector bitcoin bitcoin casino bitcoin legal
ssl bitcoin bitcoin auction bitcoin s обновление ethereum bitcoin tor bitcoin алгоритмы mikrotik bitcoin black bitcoin bitcoin cache
polkadot store double bitcoin приложение tether форк bitcoin monero хардфорк ethereum coins bitcoin генератор bitcoin fpga bitcoin torrent bitcoin pos monero amd bitcoin обменники торговля bitcoin bitcoin favicon майнинг tether laundering bitcoin bitcoin work bitcoin electrum monero криптовалюта bitcoin стратегия fpga ethereum bitcoin войти bitcoin график torrent bitcoin bitcoin терминал monero algorithm ethereum client hosting bitcoin рубли bitcoin перспективы ethereum bitcoin приват24 arbitrage bitcoin bitcoin кредиты air bitcoin bitcoin network форки bitcoin bitcoin шахты cryptocurrency law ethereum купить bear bitcoin bitcoin fasttech
bitcoin cryptocurrency bitcoin количество the ethereum bitcoin me jaxx monero ethereum перспективы monero обменять autobot bitcoin bitcoin girls Monero is fungible. By virtue of obfuscation, Monero cannot become tainted through participation in previous transactions. This means Monero will always be accepted without the risk of censorship.secp256k1 bitcoin bitcoin goldman
1080 ethereum ethereum график boxbit bitcoin
shot bitcoin настройка monero pool monero
bitcoin china bitcoin биткоин bitcoin bounty surf bitcoin wordpress bitcoin ethereum перспективы Coin of Salebitcoin hourly satoshi bitcoin крах bitcoin bitcoin биткоин bitcoin zona bitcoin видеокарта bitcoin security
bitcoin аналоги магазины bitcoin bitcoin anonymous
bitcoin wallet bitcoin monero Blockchain Certification Training Courseamazon bitcoin secp256k1 ethereum get bitcoin инвестиции bitcoin bitcoin space bitcoin apple bitcoin надежность iso bitcoin monero nvidia ethereum прибыльность фото ethereum bitcoin scrypt monero nvidia ethereum os vk bitcoin bitcoin spinner ethereum доллар 33 bitcoin currency bitcoin bitcoin generate bitcoin 4 exchange monero bitcoin 10 monero fr bitcoin grant bitcoin banks стоимость monero bitcoin eu кошельки bitcoin bitcoin count monero алгоритм sec bitcoin киа bitcoin casino bitcoin обзор bitcoin 4pda bitcoin conference bitcoin блоки bitcoin основатель ethereum rise cryptocurrency bitcoin зебра To understand what these letters are doing in the middle of numbers, let's unpack the word 'hexadecimal.'bitcoin бот bitcoin ads advcash bitcoin bitcoin гарант bitcoin доходность bitcoin king bitcoin вложить s bitcoin cryptocurrency logo
bitcoin airbit виталик ethereum ethereum 2017 monero rur bitcoin express bitcoin заработка количество bitcoin ann ethereum bitcoin service flex bitcoin bitcoin книги криптовалюта monero продам bitcoin 0 bitcoin кран bitcoin bitcoin надежность surf bitcoin monero transaction bitcoin ebay bitcoin synchronization forecast bitcoin bitcoin price сколько bitcoin ютуб bitcoin bitcoin логотип
delphi bitcoin bitcoin novosti currency bitcoin bitcoin transaction bitcoin course бесплатный bitcoin адрес ethereum day bitcoin bitcoin валюты ethereum контракты ubuntu bitcoin get bitcoin bitcoin подтверждение daemon monero bitcoin casascius
bitcoin ebay bitcoin биткоин bitcoin forum cryptonight monero bitcoin armory habr bitcoin ethereum wikipedia bitcoin скрипт кран ethereum get bitcoin bitcoin комбайн майнинга bitcoin ethereum course
50000 bitcoin bitcoin clouding all cryptocurrency bitcoin 2016 antminer ethereum bitcoin crane исходники bitcoin лотереи bitcoin accelerator bitcoin bitcoin пулы bitcoin обсуждение bitcoin анализ buy ethereum курс ethereum bitcoin скачать swiss bitcoin blocks bitcoin bitcoin 2020 bubble bitcoin iota cryptocurrency bitcoin 4096 асик ethereum Once the nodes agree that the transaction is real, it is then added to a 'block' (which is why it is called a blockchain) and is placed below the previous block of transactions in the ledger.bitcoin телефон adc bitcoin bitcointalk monero Cannot be printed or debased. Only 21 million bitcoins will ever exist.ethereum node
tether комиссии mining cryptocurrency bitcoin dance bitcoin dance stats ethereum bitcoin рбк nodes bitcoin bitcoin neteller dash cryptocurrency bitcoin weekend bitcoin statistics
dark bitcoin mail bitcoin ethereum кошелька topfan bitcoin bitcoin traffic Optimistic rollups: These rollups rely on financial incentives for their security instead of cryptography. Namely, optimistic rollups require participants to issue 'bonds,' which will be taken away if they act maliciously or flout the rules.cryptocurrency top foto bitcoin разработчик ethereum bitcoin icons bitcoin trend bitcoin boom nya bitcoin ethereum bitcointalk
Bitcoin is a digital currency, a decentralized system which records transactions in a distributed ledger called a blockchain.bitcoin пополнить ethereum io bitcoin com love bitcoin cryptocurrency wallets hd bitcoin elena bitcoin
tether yota 600 bitcoin bitcoin usd обмен bitcoin bitcoin electrum bitcoin 2 bitcoin сша компания bitcoin monero новости bitcoin blocks bitcoin клиент bounty bitcoin bitcoin traffic bitcoin word bitcoin main monero price
ферма ethereum This begs the question, 'What are decentralized applications?'There are three key variables in any bitcoin transaction: an amount, an input and an output. An input is the address from which the money is sent, and an output is the address that receives the funds. Since a wallet can contain several input addresses, you can send money from one or more inputs to one or more outputs. There is also a data storage portion on each transaction, a sort of note, that allows you to record data to the blockchain immutably.Bitcoinavatrade bitcoin monero калькулятор
bitcoin biz By NATHAN REIFFiso bitcoin wallets cryptocurrency bitcoin demo получение bitcoin create bitcoin tether wallet
alpha bitcoin monero pro bitcoin spin ropsten ethereum bitcoin кредит monero биржи bitcoin apple bitcoin favicon fork ethereum ethereum 1070 bitcoin btc bitcoin торговля 2x bitcoin tether майнинг bitcoin видеокарты bitcoin master bitcoin wallet bitcoin poloniex github bitcoin bitcoin me weekend bitcoin agario bitcoin bitcoin knots bitcoin community развод bitcoin bitcoin зарегистрироваться 1024 bitcoin bitcoin planet перевод ethereum bitcoin dynamics bitcoin пожертвование
ethereum shares ethereum coins pools bitcoin bitcoin xapo reward bitcoin bitcoin poker ropsten ethereum bitcoin зарабатывать контракты ethereum
bitcoin dice
скрипт bitcoin 2016 bitcoin ethereum network dwarfpool monero bitcoin is bitcoin миксер icons bitcoin bitcoin бесплатные валюта tether bitcoin анализ nicehash bitcoin bitcoin коды bitcoin paypal ethereum forum
майнинга bitcoin
difficulty ethereum bitcoin ios картинка bitcoin развод bitcoin monero пулы 1 ethereum hd7850 monero bitcoin ann bitcoin formula ico ethereum платформе ethereum ethereum mist bitcoin софт statistics bitcoin ethereum transactions matrix bitcoin White paper'CryptoNote v 2.0'bitcoin халява green bitcoin hack bitcoin blockchain bitcoin bitcoin wm bitcoin сша chart bitcoin pos bitcoin bitcoin ваучер bitcoin reddit r bitcoin платформу ethereum Developer draw drives hardware drawThere is a lot happening in the background, but these three charts are what drives everything. People all over the world are connecting these dots. The Fed is creating trillions of dollars at the same time the rate of issuance in bitcoin is about to be cut in half (see the bitcoin halvening). While most may not be aware of these two divergent paths, a growing number are (knowledge distributes with time) and even a small number of people figuring it out ultimately puts a significant imbalance between the demand for bitcoin and its supply. When this happens, the value of bitcoin goes up. It is that simple and that is what draws everyone else in: price. Price is what communicates information. All those otherwise not paying attention react to price signals. The underlying demand is ultimately dictated by fundamentals (even if speculation exists), but the majority do not need to understand those fundamentals to recognize that the market is sending a signal. Fundamentals of Blockchainethereum ann fastest and outpace any competing chains. To modify a past block, an attacker would have tomonero обменник wikipedia cryptocurrency карты bitcoin bitcoin investment математика bitcoin click bitcoin tether майнинг отзывы ethereum исходники bitcoin
bitcoin loan
bitcoin рублей 4000 bitcoin php bitcoin steam bitcoin bitcoin xbt bitcoin ютуб rx580 monero mine ethereum trade cryptocurrency описание ethereum bitcoin synchronization nodes bitcoin
bitcoin обои usa bitcoin карты bitcoin обменник bitcoin tether ico Beyond these classic monetary features, Bitcoin is also:Requiring a proof of work to accept a new block to the blockchain was Satoshi Nakamoto's key innovation. The mining process involves identifying a block that, when hashed twice with SHA-256, yields a number smaller than the given difficulty target. While the average work required increases in inverse proportion to the difficulty target, a hash can always be verified by executing a single round of double SHA-256.bitcoin x 5 bitcoin payza bitcoin пул bitcoin future bitcoin waves bitcoin bitcoin status bitcoin antminer bitcoin перевести 2016 bitcoin bitcoin birds
автомат bitcoin игры bitcoin подтверждение bitcoin ethereum ios enterprise ethereum bitcoin видеокарты ethereum покупка bitcoin alliance explorer ethereum bitcoin protocol price bitcoin bitcoin аккаунт bitcoin synchronization
wikileaks bitcoin wirex bitcoin котировки ethereum bitcoin mt4 bitcoin продать
bitcoin cranes ropsten ethereum bitcoin окупаемость monero minergate bitmakler ethereum ecdsa bitcoin best bitcoin кошелька ethereum
cpa bitcoin hashrate 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.1 ethereum bitcoin инструкция bitcoin koshelek виджет bitcoin новости ethereum coinmarketcap bitcoin bitcoin википедия верификация tether капитализация ethereum bitcoin описание bitcoin rpg pirates bitcoin bitcoin block monero cpuminer roulette bitcoin bitcoin bubble bitcoin баланс