💸 Bitcoin mining experienced an upsurge at the turn of 2024. An interest in Ordinals, expectation of spot ETFs' approval, and halving are the three main components of increased mining profitability due to the growth of the bitcoin exchange rate and its network commissions.
We tell you what and how the mining industry could change in 2024 in our article.
💭 Let's understand together on the example of cooking a dish according to a culinary recipe.
How does any recipe begin? Right, with the ingredients, so let’s choose the components we need to make a block.
➡️ Transaction set ➡️ Block version ➡️ Timestamp ➡️ Complexity label ➡️ Block number
You may not understand what a complexity label or block version is, or how to compile a transaction set.
Complexity is determined by how many zeros a hash should have. The more zeros, the higher the complexity. The block version shows the current version of the blockchain protocol (it may be updated periodically). And the set of transactions is chosen arbitrarily. The miner can arrange the transactions in any order he wants (usually he arranges them in such a way that he earns more from commissions, so the more you pay for a transaction, the faster you will be included in the block).
So we've piled up our ingredients and start cooking. First of all, let's make a Merkle tree of our transactions. This is a structure for convenient and compact storage of information.
And then we choose a nonce - a random number that should help us in finding the "correct" hash. If the hash turned out to be unpalatable and does not fit, we throw out the nonce used for calculations and take another random number. So after some time we can find the right hash with a sufficient number of zeros.
After the hash is found, we consider that the block is ready and broadcast it to the network, where other network members will check the correctness of the block.
🆘Only 42 days left until Bitcoin halving. Meanwhile, we recommend reading our cards to refresh your knowledge, as well as checking out the fascinating article on our blog.
