What is mining? What determines the mining income?
It is reported that what is mining? What determines the mining income? In recent years, with the popularity of cryptocurrency, there are coin speculators, coin miners and mine miners. So what is mining? What is the mine? Let's take a look at mining.
What is mining?
Mining is a very interesting thing. As long as the mining machine is plugged into the electricity, network and power on, it can continuously produce virtual currency 24 hours a day. Miners are computers used to earn Bitcoin. These computers generally have professional mining cells, and most of them use burning cards to work, which consumes a lot of power. Users can download software with their personal computers and then run specific algorithms. After communicating with remote servers, they can obtain the corresponding Bitcoin, which is one of the ways to obtain Bitcoin.
"Mining" is essentially a complex mathematical problem solved by computer. Let the computer guess a random number at will. There is no limit to its size and length. Input the random number and the content of the last block on the blockchain into a SHA256 hash function to calculate a 256 length binary number. Then submit the binary number to the Bitcoin network. Bitcoin network will automatically judge whether the binary number meets the conditions. When the conditions are met, the Bitcoin network will reward you with a certain amount of Bitcoin, and then the Bitcoin network will broadcast to the nodes of the whole network that a new block has been generated. Each block records the number of the current block, the reference of the previous block, the number of transactions, the size of the block, and the transaction list.
What determines the mining income?
1. Calculation difficulty
What is the difficulty of computing? It starts with the Bitcoin system. Blockchain is the underlying technology of Bitcoin. Simply speaking, blockchain is an open ledger, which is obtained by competing for accounting rights.
The contest for bookkeeping right is also to solve a super difficult and complicated mathematical problem in the whole network, that is, hash operation. Through the collision of hash values, the correct answer can be calculated within 10 minutes, even if the bookkeeping right is contested and Bitcoin is obtained.
Since Nakamoto Cong dug up the first 50 bitcoins, the output of bitcoins has been halved every four years, from 50 to 25 to 12.5 now.
With the halving of Bitcoin output and the rising of currency price, more and more mining machines are involved in the struggle for bookkeeping rights, which leads to the rising of computing power and the difficulty of competing for bookkeeping rights.
The difficulty of fighting for the bookkeeping right determines the difficulty of computing power. The amount of calculation input directly determines the income of miners.
The less difficult the computing power of the whole network is, the easier it is to compete for the bookkeeping right, and the smaller the corresponding input of manpower and electricity. For miners, of course, they want to use the least input to obtain the highest income. So, of course, we should pay attention to the difficulty of calculation.
2. Currency price
The second factor that affects the miners' income is the currency price. Of course, the miners are most concerned about how much bitcoin they can get back.
Because of the decentralized nature of Bitcoin, point-to-point transactions are realized without being affected by the region and exchange rate. The daily average transaction volume of Bitcoin across the network is up to more than 10 billion, with high circulation value and convenient transactions.
As the digital gold in digital currency, Bitcoin's unique value is highlighted. Driven by the consensus mechanism, the circulation and value of Bitcoin will only become stronger and stronger with the continuous development of blockchain technology.
3. Electricity price
The third factor that affects miners' income is electricity price, which directly affects the income of mining.
The higher the computing power of the mining machine, the smaller the power consumption, and the lower the cost of digging Bitcoin. It directly affects the income of miners.
Power plants are divided into thermal power plants and hydropower plants, where there is a steady power supply throughout the year, but the electricity price is slightly higher. The hydropower plant has flood season and dry season. The electricity price is very low in the flood season, but in the dry season, it will face a comprehensive power failure, no electricity available, and the mining machine is out of service.
The shutdown of the mining machine means that the miners have no income. The mining union is faced with lower income when the currency price is too high.
In general, mining is essentially to solve a complex mathematical problem with a computer, so that the computer can guess a random number at will. There is no limit to the size and length. The influencing factors that determine the level of mining income are mainly the size of computing power, electricity price, currency price, the number of block incentives and the price of mining machines. Different currencies have different specific conditions. For example, Bitcoin and Ethereum mining mainly focus on computing power, while IPFS mining mainly depends on hard disk capacity and network speed.