How does Bitcoin mining work?

by Amrita Mitra | Feb 27, 2017 | Bitcoin, Blockchain

In the previous articles, we discussed what is Bitcoin. So, we know the overview of what does it mean by the mining of Bitcoin. Let’s look into a bit more detail in this article on how the mining of bitcoin is done.

You can read the previous articles here:

How does Bitcoin mining work?

In the article What is Bitcoin mining? , we came to know that Bitcoin miners have to perform a cryptographic hash taking into account the current block of transactions during a certain period of time (What is Blockchain and how is it used in Bitcoin?), the previous block in the chain, and something called ‘nonce’ and find a hashed value less than the difficulty target.

But what is this ‘nonce’ actually? And how does it work? Let’s elaborate on it a bit further.

Bitcoin uses the hashcash function as the mining core. This hashcash algorithm requires mainly three parameters:

a service string
a nonce and
a counter

What is a ‘service string’?

In Bitcoin, a service string is encoded in the block header data structure. It includes the following fields:

a version field
the hash of the previous block in the blockchain
the root hash of the Merkle tree (What is the Merkle Tree?) of all the transactions in the current block
the current time
the difficulty

What is a ‘nonce’?

The ‘nonce’ in a Bitcoin block is a 32-bit field whose value is set so that the hash of the block will contain a run of zeroes. As we have seen, the service string for a block cannot be changed, so by changing …

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