How Does Bitcoin Mining (Not Really) Work?



ORIGINAL POST
Posted by Ed 2 yrs ago
https://cdn.substack.com/image/fetch/w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F7aaf3e0a-981b-4ef4-976b-41534cf856d5_600x402.png
 
Ask this question of a Bitcoiner and you might receive a face full of jargon like "hash" and "nonce", which is a Bitcoiner's way of telling you how smart they are. But even the attempts at simple explanation have not yet settled to the economically optimal. The Investopedia explanation is a common one:
 
Bitcoin mining is the process by which new bitcoins are entered into circulation. It is also the way the network confirms new transactions and is a critical component of the blockchain ledger's maintenance and development. "Mining" is performed using sophisticated hardware that solves an extremely complex computational math problem. The first computer to find the solution to the problem receives the next block of bitcoins and the process begins again.
 
I recall first hearing about how miners "solved complex computational math problems" and thinking this had something to do with factoring massive integers into large primes or performing operations associated with elliptic curves. These are the computations associated with the "trap door functions" (easier to compute one way than in reverse) that allow for the most common forms of modern cryptography. And while Bitcoin uses a modern form of cryptographic protection known as SHA-256, you can understand the basic idea of mining without knowing anything at all about the mathematics of cryptography.
 
https://roundingtheearth.substack.com/p/bitcoin-beginners-mining-is-a-lottery

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