We have already described the issue of cryptocurrency miners themselves. We checked how they differ from ordinary computers, what they actually are, as well as we learned about their different types. Today we will take a closer look at how a typical bitcoin miner works and again look at the Proof-of-Work algorithm. How does bitcoin mining work? What exactly is bitcoin mining? As you know, the foundation of the cryptocurrency network is blockchain technology. It's a decentralized (meaning it doesn't have a single issuer) registry (or in other words: database) containing various information such as transaction histories. Some blockchain systems (including, e.g. Bitcoin's blockchain) are closely related to cryptocurrency miners, which allow to maintain security and operation of the network. When explaining what bitcoin and other cryptocurrency mining is all about, one can use the metaphor of "solving mathematical puzzles." These puzzles, grouped into blocks of data (hence the name blockchain), enable verification of transactions occurring on the network. However, what is important for the mining market, the BTC network automatically changes the difficulty of the tasks performed, depending on the speed of their solution. Moreover, it cyclically changes - or, to be more precise, decreases - the size of the reward that the owner of the digger (digital miner) who solved this mathematical puzzle receives. It is also worth noting that the more people join the network with their equipment, the more the difficulty of digging increases. The above rules were designed by the creator (creator?) of Bitcoin - anonymous Satoshi Nakamoto. The basis of the entire process is the SHA-256 algorithm. SHA stands for Secure Hash Algorithm. SHA 256 is a 256-bit cryptographic hash function, which is used as proof of work (Proof of Work) in the Bitcoin network. We discuss Proof-of-Work in more detail below. How is BTC copied today? Today it is increasingly rare to mine BTC on a home computer or even in a home environment (a few years ago this was the norm). In fact, such old school bitcoin digging can only be afforded by someone who has free electricity. Nowadays it is not worthwhile to mine solo, much more popular are the so-called mining pools. These are places where different miners pool their mining power to form a kind of community that digs BTC. They then divide the profits proportionally to their contribution. However, this is not all. Today, the market of cryptocurrency miners is mainly whole bitcoin mines. These are even specialized complexes, within which huge computing power is concentrated. The effect is achieved by combining multiple ASIC units and (or) GPU. Thus, the effect is achieved, as we have already described in the case of mining pools. Today the largest such farms are located in China, Russia and the USA. Certainly in the future the importance of regions of the world which guarantee miners the cheapest possible electricity and friendly legislature will also begin to grow. Bitcoin miners and proof of work (Proof-of-Work) The Proof-of-Work (PoW) algorithm, which is the foundation of bitcoin mining, is also worth mentioning. It is something older than cryptocurrencies, as it was created back in the 1990s. The main idea of its creators was to provide more anonymity to internet users, which was already seen as some very important phenomenon for the multitude of internet users. The basis of the algorithm are very complicated mathematical calculations, which - due to their complexity - are performed by a machine. Performing them by a human alone would be very breakneck, not to mention delivering them in a short period of time. Performing these mathematical puzzles, in turn, is a prerequisite for joining a network based on this algorithm at all. Hence, a prerequisite to join the network is to have a bitcoin digger, or a device dedicated to another algorithm. The Proof-of-Work algorithm itself is based on the so-called proof of work done by the device. PoW in its essence is a bit like the popular game Sudoku. The mathematical task itself that we get is very difficult to solve, but at the same time quite easy to check by the rest of the network participants. This gives an effect that protects the BTC blockchain from attacks by rogue network participants. The idea is that devices that perform incorrect calculations can be easily detected. In turn, false results provided by them are ignored. In this way, so to speak, information from fraudsters is filtered and the network is kept in order. Bitcoin miners today Today, miners mostly go for ASIC diggers as the most efficient type of digger for cryptocurrencies such as bitcoin. Actually, it is hard to surprise them. These devices are more cost-effective, more efficient and consume less power than GPUs, which dominated the market in the early years of cryptocurrencies. Moreover, they are the perfect solution for individuals or teams of miners who want to build said farms. The advantage of ASICs is their dimensions
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