Bitcoin mining
This is a fairly complex subject so I’m going to try to break it down into two parts and keep things as simple as possible. When a block is being mined in the Bitcoin network it performs several functions. I’m going to list and detail these functions however, if I were to crudely and simply explain how a block is mined, I would simply say… After receiving a block the nonce is varied in order to mine Bitcoin by generating different hashes of the block header. we spoke previously about the avalanche effect and how varying the nonce completely alters the hash. so I will now list some of the blocks properties but give a bit more detail to the nonce header as that’s the main take away I would like you to understand.
The Bitcoin network it performs several functions…
Validation of Transactions.
The miner, or you collect a list of unconfirmed transactions from the network’s transaction pool, and then you validate them automatically to ensure that they are in fact valid and conform to the network’s rules.
Creation of the Merkle Root.
The miner takes the validated transactions and creates a Merkle tree. This is a data structure that is used to summarize the transactions in the block. The Merkle root is the top-level hash of the Merkle tree, this acts as a digital fingerprint of all the transactions contained within the block.
Block Header Creation.
The miner creates a block header that includes the following information.
The previous block’s hash (this links the blocks in the blockchain).
The Merkle root of the current block.
A timestamp.
The nonce.
The nonce is varied in order to mine Bitcoin by generating different hashes of the block header. A hash function takes an input (in this case the block header) and returns a fixed-size output (the hash). In Bitcoin mining, the goal is to find a hash that is below a certain target.
The nonce is one of the inputs to the hash function, and changing its value changes the resulting hash. Miners will increment the nonce and compute the hash again, hoping to find a hash that is below the target. This process is repeated billions or trillions of times per second until a hash is found that meets the requirements.
Since the target is set in such a way that it is very difficult to find a hash below it, finding a hash that meets the requirements requires a lot of computational power, trial-and-error. The miner who finds a hash that meets the requirements first is rewarded with newly created bitcoins and the right to create a new block and broadcast it to the rest of the network.
Proof-of-Work.
The miner must perform a computational process called proof-of-work, which involves finding a nonce that, when combined with the other data in the block header, results in a hash with a certain number of leading zeros. This is a difficult and time-consuming process that is designed to secure the network and prevent double-spending.
Broadcast of the Block.
Once the miner has found a valid nonce, it broadcasts the block to the network. The network’s nodes then validate the block and, if it is valid, add it to the blockchain.