Topic: Question about verifying transcations (Read 398 times)

Thank you very much, ranochigo. Your answers helped me a lot. Things are really much more clear now!

Depends if they are actually a ponzi scheme or not. If they are operating their own server and not mining on another pool, yes, they can get the reward from time to time.
Yes. If you are on a mining pool, it works on the same principle, everyone puts in work and everyone gets their proportional share. If you are mining on your own (I do it sometimes with my small 100gh/s rig), you risk not getting a reward in your entire lifetime unless you join a pool.

It's called solo mining where you get the entire block reward. If you have small hashpower, its considered lottery mining since the chances of you getting anything is equivalent to getting in a lottery.

Thank you very much for the answers, guys! I've read it numerous amount of times, also cleared some stuff with bitcoin wiki, so that I can understand clearly what you wrote and now the mining part is clear enough. I really appreciate you taking time to write good stuff.

The one last thing I would like to ask is, if you're using let's say cloud mining services, it only means that you earn because they (the company who is renting the hardware) is getting the reward (12.5 BTC + transaction fees) from time to time, right? And they are giving you a small share of that. Since it wouldn't make sense, if you rent a bitcoin miner, do it "on your own" only with that little hardware you got and earn a dollar or so (as you do), since the "winner" of a block is only one. And he gets fresh 12.5 BTC + transaction fees all for himself. Please let me know if I don't miss anything here.

Not really. Miners are hashing block header and changing it after every hash to try to meet the target[1] by increasing the nonce. The block header contains various information such as the version number, hash of previous block, merkle root, timestamp etc.

Once the block fits the target requirement, it is considered valid by the network. Hence, every block within the same difficulty period are equally difficult to find.
It is technically not writing transaction data into the group. The hash of the transactions are all hashed in the merkle root so the transaction is technically already in the block when the miner starts on the block.

Every single node in the network verifies the transaction, the miners are merely putting it into the blockchain.
They don't mess with the previous block. They just expand on the previous block by including the hash of the previous block.
The miner gets 12.5BTC+transaction fees that is from the transactions in the block.
They do verify the transaction but it is not the main reason why they are rewarded.
I think you misunderstood the entire mining process so I'll just explain how it works.

Firstly, the miner assembles a set of transaction that he wishes to include in his block. The merkle root should contain the transactions that the miner is planning to include, the coinbase transaction which contains the 12.5BTC reward and all the mining fee that is paid by the transaction in the block. Next, the miner combines this with other information such as the version number, hash of previous block, merkle root, nonce, etc and this is the block header. Next, the miner starts to hash the block header till it reaches the target and if it does, the miner relays it to the network. The nodes in the network will examine the block and choose to accept or not to accept the block according to their own rules, eg. minimum difficulty validity of transactions.

If the block doesn't hit the target, the miner will change the nonce or the information in the transaction to try again. The faster you can calculate hashes, the higher your probability of hashing a block header that can meet the target.

[1] https://en.bitcoin.it/wiki/Target

The chances of finding a block depend on hashrate only afaik... it's simple. The more hashrate you have, the higher chances of finding a block.

Miners just process blocks which contains the transactions. They get the fees and the freshly created bitcoins depending on where we are in terms of inflation rate (right now the 12 BTC that you mentioned-its 12.5 BTC exactly btw-, which afaik gets split across the mining pool, same as fees)



I don't know what you mean with "verifying transactions". You may mean validate transactions? that's what full nodes do. You run a full node and depending on what full node you are using it may consider as valid or not a certain block, which is why "The Powers That Be" want to push the huge blocks agenda, because then people can't run their full nodes and decide what is or isn't a valid block themselves.

There are a lot of youtube videos that may explain this better than me.

Hello,

I've just started reading more about Bitcoin and would like to ask couple of details about the mining process. As far as I understand, mining is basically:

1. Trying (guessing) to find a hash, which would fit as an answer to Bitcoin network for the current block. Each block needs a different answer and it varies all the time depending on how easy or hard it is to find that answer for miners.

2. Verifying transcations, made by other bitcoin users at the moment (while this block is being solved) and writing the transcation data to the block.

Of course, there are other things involved into mining, as providing security, writing the data of a previous block, however I basically talk about the Reward part, how miners are earning cash. In the first case, whenever a block is solved (which can be done only by one person at the time), the miner gets a reward, which currently is 12 BTC. There are pools, who are looking for correct hash together and then splitting the profits afterwards. So, in this case, the hash speed is the most crutial part, which is needed to look for the correct hash to solve the current block.

However, I would like to know more about the second part. Miners also earn money by verifying transactions, right? How is it done? Since everyone is looking for the correct hash, at the same time and for the same block, does every miner at the same time (while guessing the needed hash) are getting different transaction data from somewhere and write them into a block and then the block is finished by a person, who finds a needed hash, or it is done somehow else? So, my main question is: What determines how fast a miner can verify a transaction or how many of them? In the first case, hash speed is most important (since you have to guess as much hashes as possible to solve the block), what would be equal for it here? How a person finds a transaction which needs to be verified and why only he receives that transaction fee?

Please correct me if I'm wrong in any of the parts, since I'm absolutely new in the crypto world.

Thanks