online mining

Mining Alarm

Today, about o'clock UTC, on the Bitcoin network was sent out an emergency alert to stop the search for new blocks (Mining) on ​​the client version 0.8. On bitcointalk.org was reported calling for the same thing. In addition, proposed to suspend any action associated with sending BTC.



The same happened next. Network Client version 0.8 generated a block number 225430 (000000000000015c50b165fcdd33556f8b44800c5298943ac70b112df480c023) containing the 1752 transaction. This proved too much for the client version 0.7 and older. Library Berkley DB, used to store the pieces could not import this monster and the block was not considered valid for all clients version <0.8.

That is, all active clients Bitcoin network were divided between those who took 000000000000015c50b165fcdd33556f8b44800c5298943ac70b112df480c023, and those who refused the unit and has a chain of other, smaller unit 00000000000001c108384350f74090433e7fcf79a606b8e797f065b130575932, comprising 797 transactions.

And it's a disgrace. Network integrity was compromised. A few hours opposing clients could not decide which is more correct chain and create new blocks for their supply chains. In the Bitcoin network is a means for the automatic release of such difficulties: taken for granted over a long chain of blocks. But without administrative action, this system would not work. Much of the customers, and, more importantly, many pools of miners (miners) have already upgraded to version 0.8. If mining, searching for new units was not stopped at this version, now we have two options Bitcoin is rapidly diverging farther and farther. Along with a bunch of utter real money that they are enclosed. Fortunately, this did not happen. As of now, the chain is derived from 00000000000001c108384350f74090433e7fcf79a606b8e797f065b130575932 won.

But the aftertaste remained. It's not even the fact that the code that supports the Bitcoin system may be bugs, they are everywhere. But the one who controls it all. This incident clearly shows that even a well-designed system is vulnerable against the tyranny of the very few people, namely, the owners of the mining pools. More than 70% of the new units are now just in the pools, and not on individual clients. The idea behind the system that most of the good people can resist a little wicked, when found, is not currently running. The winner of the battle will be possible one with thicker computing power, and nothing more.


UPD: Sorry, was not without consequences. There was an almost double spending. 211 BTC, which is equivalent to about $ 10,000 at today's prices have been spent twice. Almost, because in accordance with the basic block chaining money was spent only one day. But the processing of the payment system, under the strain of last night, worked twice, for both chains of blocks. Transaction. Details.

mining bitcoin

Bitcoin pooled mining is a way for multiple users to work together to mine bitcoins, and to share the benefits fairly.

Why do I need bitcoin pool?

Bitcoins are ordinarily only ever created in chunks of 25 at a time, with the whole 25 paid to a single person. Furthermore, the race to get the 25 BTC prize in a given block is highly competitive.

If you set out mining on your own, it may be a long time before you can make a return. Pooled mining allows you to receive smaller, more frequent, steadier payouts instead. If you have a slower computer, or a CPU miner, then pooled mining may be the only way that you will ever mine any bitcoins at all.

How does bitcoin pool work?

Our server gives users blocks of very low difficulty to solve. Each solution found is registered as one 'share'. Occasionally, a solution will happen to also meet the full-strength difficulty requirements of the Bitcoin network, resulting in a successful 25 BTC minting.

This 25 BTC is divided among all of the users that contributed to that round, weighted by the number of shares that they earned. Therefore, the reward earned by a given user is given by the following formula:

(25 BTC + block fees - 2% fee) * (shares found by user's workers) / (total shares in current round)

Shares do not carry over from one round to the next. When the pool mine a block, only users who worked on that block are rewarded, and only for work they did on that block. This is an unavoidable consequence of the way that Bitcoin mining in general works.

In fact the formula above is simplified. The real math behind the payout system is described here.

The 2% fee is used to keep this service alive.

History of BTC

History

Main article: History

A cryptographic system for untraceable payments was first described by David Chaum in 1982.^[6] In 1990 Chaum extended this system to create the first cryptographic anonymous electronic cash system.,^[7] which became known as ecash. ^[8] In 1998 Wei Dai published a description of an anonymous, distributed electronic cash system which he called "b-money".^[9] Around the same time, Nick Szabo created bit gold.^[10][11] Like Bitcoin, Bit gold was a currency system where users would compete to solve a proof of work function, with solutions being cryptographically chained together and published via a distributed property title registry. A variant of Bit gold, called Reusable Proofs of Work, was implemented by Hal Finney.^[11]

In 2008, Satoshi Nakamoto published a paper^[12][13] on The Cryptography Mailing list at metzdowd.com^[14] describing the Bitcoin protocol.

The Bitcoin network came into existence on 3 January 2009 with the release of the first Bitcoin client, wxBitcoin, and the issuance of the first Bitcoins.^[15][16][17] A year after, the initial exchange rates for Bitcoin were set by individuals on the bitcointalk forums.^{[Citation Needed]} The most significant transaction involved a 10,000 BTC pizza.^[18] Today, the majority of Bitcoin exchanges occur on the MtGox Bitcoin exchange.

In 2011, Wikileaks,^[19] Freenet,^[20] Singularity Institute,^[21] Internet Archive,^[22] Free Software Foundation^[23] and others, began to accept donations in Bitcoin. The Electronic Frontier Foundation did so for a while but has since stopped, citing concerns about a lack of legal precedent about new currency systems, and because they "generally don't endorse any type of product or service."^[24] Some small businesses had started to adopt Bitcoin. LaCie, a public company, accepts Bitcoin for its Wuala service.^[25]

In 2012, BitPay reports of having over 1000 merchants accepting Bitcoin under its payment processing service.^[26]

AddressBlockchainBlockBTCConfirmationCryptographyDouble SpendHash RateMiningP2P - Peer To PeerPrivate KeySignatureWallet

Address

A Bitcoin address is like a physical address or an email. It is the only information you need to provide for someone to pay you with Bitcoin.

Blockchain

The blockchain is a public record of all Bitcoin transactions, in chronological order. The blockchain is shared between all Bitcoin users. It is used to verify the balance of Bitcoin addresses and to prevent double spending.

Block

A block is a record in the blockchain that contains and confirms many waiting transactions. Roughly every 10 minutes on average, a new block including transactions is appended to the blockchainthrough mining.

BTC

BTC is the unofficial three letter code for Bitcoin. It can be used as an abbreviation, like USD for US dollar.

Confirmation

Confirmation means that a transaction has been verified by the network and is highly unlikely to be reversed. One confirmation is pretty secure. Though for larger amounts ( ex. 1000 $USD and above ), one can wait for a transaction to have more confirmations - 6 is a frequently chosen number. Each new confirmation decreases the risk of a reversal exponentially.

Cryptography

Cryptography is the branch of mathematics that lets us create mathematical proofs that provide high levels of security. Online commerce and banking already uses cryptography. In the case of Bitcoin, cryptography is used to make it impossible for anybody to spend funds from another user's wallet or to corrupt the blockchain. It can also be used to encrypt a wallet, so that it cannot be used without a password.

Double Spend

If a malicious user tries to spend their bitcoins to two different recipients at the same time, this is double spending. Bitcoin mining and the blockchain are there to create a consensus on the network about which of the two transactions will win.

Hash Rate

The hash rate is the measuring unit of the processing power of the Bitcoin network. The Bitcoin network must make intensive mathematical operations for security purposes. When the network reaches a hash rate of 10 TH/s, it means it can make ten trillion calculations per second.

Mining

Bitcoin mining is the process of making computer hardware do mathematical calculations for the Bitcoin network to confirm transactions and increase security. As a reward for their services, Bitcoin miners can collect transaction fees for the transactions they confirm along with newly created bitcoins. Mining is a specialized and competitive market where the rewards are divided up according to how much calculation is done. Not all Bitcoin users do Bitcoin mining and it is not an easy way to make money.

P2P

Peer to peer refers to systems that work like an organized collective by allowing each individual to interact directly with the others. In the case of Bitcoin, the network is built in such a way that each user is broadcasting transactions of other users. And crucially, no bank is required as a third party.

Private Key

A private key is a secret piece of data that proves your right to spends Bitcoin from a specific Bitcoin address through a cryptographic signature. Each Bitcoin address has its own unique private key. Your private keys are stored in your computer if you use a software wallet while they are stored on some remote servers if you use a web wallet. Private keys must never be revealed as they allow you to spend bitcoins for their respective Bitcoin addresses.

Signature

A cryptographic signature is a mathematical mechanism that allows someone to prove ownership. In the case of Bitcoin, a Bitcoin address and its private key are linked by some mathematical magic. When your Bitcoin software signs a transaction with the appropriate private key, the whole network can see that the signature matches the Bitcoin address. However, there is no way for the world to guess your private key to steal your hard-earned bitcoins.

Wallet

A Bitcoin wallet refers to the equivalent of a physical wallet on the Bitcoin network. Each Bitcoin wallet can show you the total balance of all Bitcoin addresses it contains. Just like you can count the money in your real wallet. And in the same way, a Bitcoin wallet allows you to pay a specific amount to a specific person. This is different to credit cards where you are charged by the merchant.