What is Blockchain? Bitcoin Mining-Pool Mining-What is Block in Blockchain?
What is Bitcoin?
It is the first De-centralised currency which transfers Peer to Peer without the need of any agents, Banks or other financial intermediates by the use of Blockchain Technology.
Advantage of Bitcoin
Transfer Assets Faster, Low Fee, Cryptographically Secure, Accessible to Public, Decentralised Process, Inability to counterfeit.
What is Blockchain?
Blockchain is public distributed Ledger in which transaction made in Bitcoin or any other digital currency recorded in the chronological order. It is Cryptographically Store, Immutable, and all transactions are stored in the block.
What is Block?
The block is the smallest unit of blockchain which records all transaction and its Primary Attribute has four fields: Previous Hash, Data, Nonce, Hash.
Previous Hash: It stores the highest value of its previous block this is how the blocks are linked to each other.
Data: It contains details of all the set of transactions which are stored in the field and which were mined, validated and included in the box.
Nonce: In the proof of work, it’s a parameter which is used to generate the new hash value.
Hash: It the resultant hash value which is obtained by passing previous hash value, data and the nonce with SHA-256 algorithm. Its a cryptographically hash algorithm which produces unique alphanumeric hash value for a give data.
What is Bitcoin Mining?
It the process of verifying Bitcoin transaction and recording them onto a public Blockchain Ledger. In the Blockchain, transactions are verified by bitcoin users, so these transactions are verified by the participant of that network, those who have required hardware and are Known as Minors.
In Bitcoin Mining any user can take apart with mining hardware and internet access. It process is solved on the difficult mathematical puzzle known as proof of work and the minor who solve this puzzle first get the reward.
Three Basic Concept of Bitcoin Mining
Distributed Ledger:
It is the record of all the transaction maintain in the blockchain network across the globe and all these validations are done by the Bitcoin user known as Minors.
SHA-256:
It protects unauthorized access by using a Hash function SHA-256 to ensure the block kept secure. It takes the input string of any size and returns the fixed-length 256-bit output Value. It is a one-way function which always gives fixed length 256 bit out while passing any value, we can not derive the input reverse fully from the output that we have generated.
Proof of Work:
In the blockchain, the mining is the process to validate the transaction by solving the difficult mathematical puzzle known as the proof of work. In order to do that main objective of a minor is to determine the Nonce Value in order to generate the hash which is less than the target defined by the network of the particular block.
Minors Verify the transaction and add the block to the Blockchain when confirmed. The minor who solves the puzzle gets the reward of 12.5 Bitcoins which is equal to 119948 USD as of today.
Once the block is added to the blockchain after the validation then the Bitcoin associated with that transaction can be transferred from one account to another.
In order to generate the hash, we have to use an SHA-256 hashing algorithm to define the hash value, if the hash value is less than the predefined condition of target than the puzzle is solved, it share the result to other nodes, once the block is verified the nonce has been generated and the nodes start granting their approval and when the maximum node grant their approval the block become verified and added to the Blockchain.
If minor not able to find the resultant hash value then minor have to keep on increameting nonce value and repeat the SHA-256 hashing algorithm to generate the hash value till it gets less than predefined condition by Target.
Mining Facts
In POW, Predefined condition is adjusted for every 2016 blocks (Approx every 14 Days) and the average time to mine a block is 10 minutes.
The difficulty of the puzzle changes depending on the time it takes to mine the block.
It's very hard to generate the proof of work and its easy to verify other POW by the other minors. Since the difficulty depends on the hash targets, its value changes every 2016 block so now the difficulty has increased exponentially and it has been increasing so the entire resources that are needed in mining are also increasing now Minor require more hashing and computing power to Mine a Block.
How the Blockchain is Secure?
As the Blockchain is a chain of the block so each block has solved a puzzled and generated his own hash value which is known as its identifier so if hacker try to change the data of one of the block so if the data of the block is changing the resultant hash value (Digital Signature of Block ) will also change and it will corrupt the change which is subsequent to it and block get Delink as the previous hash value not remain valid.
So in order to make valid the entire blockchain the hacker has to change all the hash value of the upcoming block which is nearly impossible as it needs very huge computing power. By this blockchain make sure that entire process remains unhackable and prevents the Data Modification.
What is Bitcoin Mining Pool?
It is the process where multiple nodes shares there process to mine a block. when the block gets solved minor split the reward equally based on the amount of processing power.
