Bitcoin Mining Equipment

Use Bitcoin Mining Equipment to generate new Bitcoins

Bitcoin mining is a computerized process that serves basically two purposes:

• Confirms transactions in a trustful manner when adequate computational power (effort) is devoted to the block
• Creates or issues new bitcoins in each block

A typical bitcoin issuing process goes like this:

When a bitcoin transaction occurs in the bitcoin mining equipment, the first step that takes place is to verify if the transaction is valid. This transaction verification process takes place in the bitcoin mining hardware. The verified transactions are then bundled in a block which are further processed. The header of the most recent transaction in the bitcoin mining equipment is selected and then inserted into a new block as a hash. The proof of work problem is solved. Once a solution is found to the work problem the new block is added to the local block chain and propagated to the network.

Now let us understand what is “proof of work” in terms of bitcoin mining?

It is a method to ensure that the information (ie: the new block) was difficult to be created. By difficult we mean, the solution was costly and time-consuming. It costs processing power which literally translates into hardware, energy and time.

Now let us understand what is bitcoin mining difficulty?

Mining difficulty is a measure of how difficult it is to find a hash below the target value ( a 256-bit number) during the proof of work. The mining difficulty and the target value are inversely related in bitcoin mining hardware. The target value is recalculated every 2016 blocks, which roughly translates to two weeks.

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