Bitcoin-Mining - so funktioniert's - FOCUS Online

Looking for Technical Information about Mining Pools

I'm doing research on how exactly bitcoins are mined, and I'm looking for detailed information about how mining pools work - i.e. what exactly is the pool server telling each participating miner to do.
It's so far my understanding that, when Bitcoins are mined, the following steps take place:
  1. Transactions from the mempool are selected for a new block; this may or may not be all the transactions in said mempool. A coinable transaction - which consists of the miner's wallet's address and other arbitrary data - that will help create new Bitcoin will also be added to the new block.
  2. All of said transactions are hashed together into a Merkle Root. The hashing algorithm is Double SHA-256.
  3. A block header is formed for the new block. Said block header consists of a Version, the Block Hash of the Previous Block in the Blockchain, said Merkle Root from earlier, a timestamp in UTC, the target, and a nonce - which is 32 bits long and can be any value from 0x00000000 to 0xFFFFFFFF (a total of 4,294,967,296 nonce values in total).
  4. The nonce value is set to 0x00000000, and said block header is double hashed to get the Block Hash of the current block; and if said Block Hash starts with a certain number of zeroes (depending on the difficulty), the miner sends the block to the Bitcoin Network, the block successfully added to the blockchain and the miner is awarded with newly created bitcoin.
  5. But if said Block Hash does not start with the required number of zeroes, said block will not be accepted by the network, and the miner Double Hashes the block again, but with a different nonce value; but if none of the 4,294,967,296 nonce values yields a Block Hash with the required number of zeroes, it will be impossible to add the block to the network - and in that case, the miner will either need to change the timestamp and try all 4,294,967,296 nonce values again, or the miner will need to start all over again and compose a new block with a different set of transactions (either a different coinable transaction, a different set of transactions from the mempool, or both).
Now, what I'm trying to figure out is what exactly each miner is doing differently in a mining pool, and if it is different depending on the pool.
One thing I've read is that a mining pool gives each participating miner a different set of transactions from the mempool.
I've also read that, because the most sophisticated miners can try all 4,294,967,296 nonce values in less than a fraction of a second, and since the timestamp can only be updated every second, the coinbase transaction is used as a "second nonce" (although, it is my understanding that, being part of a transaction, if this "extra nonce" is changed, all the transactions need to be double hashed into a new Merkle Root); and I may have read someplace that miners could also be given the same set of transactions from the mempool, but are each told to use a different set of "extra nonce" values for the coinbase transaction.
Is there anything else that pools tell miners to do differently? Is each pool different in the instructions it gives to the participating miners? Did I get anything wrong?
I want to make sure I have a full technical understanding of what mining pools are doing to mine bitcoin.
submitted by sparky77734 to Bitcoin [link] [comments]

Tx fee market and block size.

I would to add a comment on the transaction fee market on the block size debate.
First of all after the reward will half next year and (if we do it) the increase in block size the Tx fees proportion of income for miner can potentially be 40 time more! (20x the space, half the reward).
So the miner will have to choose between publishing a block empty (less risk to be orphaned but no fee reward) or publishing a full block (a lot more fee reward but high risk to be orphaned).
This are good condition to create a transaction fees market, more significant part of the income coming from fee, and a balance between risk and profit. For the end user if your transaction took a bit long too long to process then you increase your fee a bit. But there should no case with no idea how long you have to wait or how long you have to pay. it should be smoother. Which is what you want.
The market will have what it need to find is equilibrium and no 20MB will appear suddenly because it will create a disadvantage for the miner who publish it.
In the other with and if we artificial limit to 1MB. this rock hard limit can create extremely high fees.. you just need few guys that need to send money whatever the cost, and you get extremely high fees. I guess it will be better for miner at first. but it will be unpredictable (from the average user point of view) in price and in how long it takes to process and if it's long lasting only "bitcoin bank" would be able to access the blockchain... who will run a full at you own expense (even if cheap) for coinable, circle... I can imagine a huge number of node will drop the network and great centralisation will appear specially in a case of a 1MB block blockchain. (full node only run by and blockchain only accessible by bitcoin bank..)
It has been say that lightning network will help.. but it's the same thing for 20MB block.. and actually LN require a increase in block also
Ok just wanted to share that with you guys,
submitted by Ant-n to Bitcoin [link] [comments]

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