![bitcoin-miner.jpg](https://steemitimages.com/DQmcn5YBZ935Kc8XqcG4PZkYoJM6t7VknRkdcXwT2jZgdTP/bitcoin-miner.jpg) [Image credits](https://domsteil.com/2013/11/01/bitcoin-mining/) # The Bitcoin mining is the procedure of earning money (Bitcoins) by solving math problem with a computer ## For the sake of understanding we will simplify the process Lets imagine that we have just started mining. We look at the last block that was mined and we hash its header. For bitcoin hashing a **SHA-256 algorithm** is used. You can test it for yourself [here](http://www.xorbin.com/tools/sha256-hash-calculator), just **insert any number and it will be hashed** into a long string of numbers and letters with fixed 256-bit (32-byte) size. > For example, 1234 will always give you this number: 03ac674216f3e15c761ee1a5e255f067953623c8b388b4459e13f978d7c846f4 **But you cannot reverse or decrypt** this number into 1234 back again. To do this you would have to manually insert numbers one my one into hashing calculator and compare the results. This is quite similar to what miners are doing. # Lets see an extremely simplified example of mining 1. We take a hashed header of last block: >5994471abb01112afcc18159f6cc74b4f511b99806da59b3caf5a9c173cacfc5 2. Then combine it with 3 transactions that we would like to insert in our new block >8d969eef6ecad3c29a3a629280e686cf0c3f5d5a86aff3ca12020c923adc6c92 5c69d9ac45cca700492347264d87ca2e55bf7dfeb84525f2c9ca5db416d648e0 bd43f3349b217a3d2bf205908507c28fd943b0635bc4900898f0d116de094cb8 3. And hash them by adding at the end any number, for example 1 then 2, then 3, (this number is called **nonce**) until we get at least one zeo at the beginning of our new hash: ![](https://steemitimages.com/DQmcFk6U8Xhc2yaazP8ZuXEDgvLL6d7aaTRodQGFy6nvbHQ/image.png) # After adding number 7 at the end we get our first 0 at the beginning: ![](https://steemitimages.com/DQmb8nSnCFANnFToWLJazBmZJ8r5WfzhntWpPxUkP5RWKAQ/image.png) # Congratulations we mined our first block for the reward of 12.5 Bitcoin!!!

https://steemitimages.com/DQmVUBRCDQCyvCycAdzkah5JZ1NmAubztTWWzhm3j3kBi16/mine-pic.jpg

After that we broadcast our result to the blockchain and then the next race continues to find the next block. Other miners will use our new hash to find the next block. This is why it is called blockchain technology, every part of the chain is connected to each other.

# Mining Farms ![mining-farms.jpg](https://steemitimages.com/DQmWXV5DMnCBbiETKd7GseP3siadmcK6zQVzT8PWDMftaLA/mining-farms.jpg) [Image credits](http://www.coindesk.com/my-life-inside-a-remote-chinese-bitcoin-mine/) Before it was possible to mine bitcoin even on a laptop and actually get bitcoin. However, right now the total network hashing power is so enormous that mining with a laptop is completely unprofitable even if you join a mining pool. Nowadays, there are specialized ASICs that are made specifically to mine bitcoin and you can buy them to mine bitcoin. Companies and individuals are building so called Mining Farms with hundreds of these ASICs working together to get the bitcoin reward. # Additional rewards - Transaction fees ![bitcoin-fees.jpg](https://steemitimages.com/DQmPc7rrmSJauWAboPXj12CVvEv8gHZ7jLix78Ak4qFag7t/bitcoin-fees.jpg) [Image credits](https://www.crypto-news.net/impact-of-fees-on-mining/) People who are sending transactions include additional rewards for miners, kind of like a tip, so that their transactions are included in the next block. Right now there are so many transactions in line that miners choose transaction in order of rewards. Every block right now is limited to 1 MB of memory and if you don't leave a tip or leave very little, chances are your transaction will not be included in the near future. All transactions are seen on the network, but they are not confirmed until they are included in a block.

# Not as easy as it sounds **To get one zero at the beginning is considered very easy**, if that was the case then a block would have been found in less than a milisecond with total computational power of all the miners combined right now aprox. 5,530,742,000,000,000,000 hashes per second like we found right now. ![](https://steemitimages.com/DQmNQkZUTuE775x1GeTNdCoz4JYdp4PAf5uYJj7nCJGXks3/image.png) That is why the current difficulty requires the miners to find a hash with at least 17-18 zeros at the beginning. This difficulty constantly changes by bitcoin algorithm when Hashing power changes so that blocks are found approximately every 10 minutes. ### Mining pools ![mining-pool.jpg](https://steemitimages.com/DQmesUjqpczRSMPgTFbiuhLQJerWc46CtHygRrVg2AfTFD4/mining-pool.jpg) [Image credits](https://30btc.com/information/bitcoin-mining-pool.html) The mining pools are sort of groups, where a group of miners gathers and work together. They are called miners because their task is to metaphorically “break” the blocks, which carry transactions. They are searching for a hash code of the block to be confirmed, which will open the way for the new blocks like we saw in the example above. But they combine their computational power to find it faster then anyone else, and then just split the reward. When it is done, the miners share 12.5 BTC, which is around 30,000$ for every block proportionally depending on the computational power that was used by each miner. Each mining pool also takes a percent profit from each block ranging from 0 - 4%. ## Here is the block distribution amongst the mining pools As you can see Antpool is the largest mining pool. [![](https://steemitimages.com/DQmR8p1VTxtb5hunRmAyxaZ17FN2C8CYWymATnLZ9VdBPZ4/image.png)](https://blockchain.info/pools) **Image is clickable** ## I hope that you have found this article useful and interesting and I wish you success and a bag full of bitcoin ![profit-bitcoin.png](https://steemitimages.com/DQmTn8vJE1HHj5pMvhFoBFPESYxugUJUxLSvdKDzWSHffxL/profit-bitcoin.png) [Image credits](https://bitcoinworldwide.com/mining/)

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