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81  Other / Beginners & Help / Re: First-time mining questions - advice would be nice on: April 09, 2013, 10:02:39 AM
 To expand on b!z's reply...

It helps to know a few fundamentals about mining. What every miner is trying to do is to find a hash of a valid next block. The first to do so gets a reward--currently 25 btc.

A hash is a function that takes (typically) a large input and calculates a small output. Bitcoin uses a cryptographic hash known as SHA-256. The large input is the "block", that is a list of transactions on the bitcoin network. Cryptographic hashes have the property that even minute changes of the input create a completely different output (i.e. the hash of "bitcoinisgreat" would be completely different from the hash of "zitcoinisgreat").

The goal is to try and find a hash with certain properties, specifically a hash with a large number of leading zeroes. Different hashes are created for the same block by changing a value in it.The more zeroes required, the harder it is to find such a hash. This is referred to as "difficulty". The bitcoin network regularly adjusts the difficulty to match the processing power of the miners such that (on average) a new block is created every 10 minutes.

When you mine in a pool, the operator of the pool typically sets a much, much lower difficulty. That is, the pool accepts hashes that have fewer leading zeroes than would be required by the network. Each of these that you get accepted is called a "share" and constitutes proof that you are trying to find a valid hash.

In reality, you aren't really "contributing" to a solution. The one user who finds a hash with enough leading zeroes to get the block accepted by the network isn't building on your work (or that of anyone else). The "shares" mentioned before are simply there to prove that you are TRYING (and how hard you are trying).

The reward of 25 btc is then split in some manner, with payout typically proportional to the number shares (i.e. how hard you were trying, even though you didn't actually find anything).

If we disregard the (small) fees charged by the pool operator, you would get the same amount of bitcoins out of mining alone as in a pool in the REALLY LONG run; that is, your reward would be the full 25btc once in a blue moon if you mined alone, whereas you get a tiny portion of that at much more frequent intervals if you mine in a pool.
82  Other / Beginners & Help / Re: Introduce yourself :) on: April 09, 2013, 09:32:41 AM
Finally decided to register after a bitcoin equivalent of an eternity spent lurking.
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