In the first episode of the cryptocurrency ‘Bitcoin’ series, we are introduced to ‘Bitcoin’. How is the second episode, ‘Bitcoin’ currency made? How is this completely different kind of currency made without any institutional or governmental cooperation worth billions of rupees? Who or what is making these coins? How are you doing? Where are you doing? Etc. will be discussed.

How is Bitcoin made?

Just as paper is the only way to make conventional currency, ‘Bitcoin’ is created virtually only through ‘mining’. However, a bitcoin user can earn this cryptocurrency in different ways. But mining is the only way to make bitcoin.

What is ‘mining’?

The first thing that comes to mind about bitcoin mining is that mining is a very competitive business and a relatively small number of Bitcoin users are involved.

For a normal user, ‘mining’ is possible only when the matter is being done only for the sake of will, where the matter of profit is very minor. Or it can be made efficiently for profit.

Why is this work called ‘mining’? Bitcoin mining is basically as difficult a task as extracting gold from a gold mine, hence the name. Bitcoin that is 'mined' is called 'bitminer'. Minor ‘mining’ using computer programs running on specialized hardware.

Before knowing the subject of ‘mining’, it is necessary to know the mathematical function ‘hash function’. A hash function is one that will give a seemingly simple (random) output with an input, but extracting input from the output is difficult, in many cases even impossible. And the same output will come every time as opposed to the same input. For example, if we apply the function to p, hash (p) = q. Here the meaning of q is known and p is unknown, in most cases it is impossible to know the meaning of p. If the value of p does not change, the hash (p) will always be q. However, in the case of good ‘hash functions’, p and q carry different values, i.e. are unique.

Bitcoin mining hash function SHA-256 is used. SHA (Secure Hash Algorithm) This hash function, designed by the United States National Security Agency (NSA), was first published in 2001. It is completely impossible to break this system which is very important for security.

According to the theory, hashing and encrypting a message will result in n-amount bits (bit means 0 or 1 in computer programming language). According to the Brute Force method, the detected ঐ encrypted message will have 2 ^ n-steps of the corresponding message. Again, two messages can also be found in the Birthday Attack Method, which also results in n-bit, but will require 2 ^ (n / 2) steps. The bigger the n here, the harder the subject. In SHA-256 this calculation is done with 32 or 64-bit word.

There is no suitable algorithm for solving many problems in computer science. The process of working on other possible issues to solve such problems until the expected solution is found is called Brute Force Method. A lot of the body's solution or emphasis is the kind of mulluk.

Bitcoin mining refers to the creation of bitcoins by solving difficult mathematical problems through computer programming. Basically, using this SHA-256 function, a block chain is created across blocks one by one. The feature of these is that it is impossible to reverse the previous block by looking at a block, and it is possible to fully verify this blockchain. Because no more than one output will be created from one input.

Let's examine with an example. http://www.xorbin.com/tools/sha256-hash-calculator - Go to this link and type in textbox - without quotation write “pay me, joe, 25 bitcoins. 000001 ”. Then click on Calculate SHA256 hash text. Too long will show a hexadecimal number starting with 4699f0e443b7 .............

Anyone can do this. But in the case of mining, that work is acceptable, which is rarely found. And, who or what did that work, or what evidence? That said, the work will only start when this number starts with 0. 000001 started changing the number 1, 2, 3, 4 .... thus changing the number. When you write 13, the result is that the generated string starts with 0 - 0ac980 ....... This time scarcity (relatively few attempts succeed) and ‘proof-of-work’, that is, the proof by which this work has been done, are coming to the fore.

A bitminer must not use something like “pay me joe ...”! Instead, the computer's programming code, including receiving addresses on the network, etc. will use various information. But no person's name is used. Other information includes transaction information, timestamps, and most importantly a blockchain.

Lastly, the string that will come up makes it impossible to see what information is inside - that is, the computer did some work on its own to create this number. This may seem easy. But in reality it is not so easy. Because, by 2013, a bitcoin hash output would have required 14 zeros (0) at the beginning. Otherwise Bitcoin would not accept the network output.

As soon as the number is created with 14 zeros, the input of that number reaches the rest of the computer in the peer-to-peer network. And other users relay each other by verifying the output. In this way the relay is used in the whole network. The output maker was rewarded with 25 bitcoin coins. No one else can change ‘joe’ to ‘bob’. If you do, the entire hash output will change.

And is it so difficult to keep 14 zeros (0) in the beginning? Right now, all BitMinors around the world can try to produce one output every ten minutes by trying 30 trillion times per second, which is rewarded with 25 bitcoins.

And why is mining so difficult? Because the difficulty level is with all the bitcoin users in the entire network. Each minor calculates or estimates for itself how much ‘difficulty of solution’ it will take and relay across the network.

Each minor checks the most recent solutions taken across the network with a specific timestamp along with the current timestamp to reach the same conclusion. In this case, the timestamp will be to get 2016 solutions every two weeks, i.e. there is an average break of 10 minutes between one solution and another.

In this case, the time-break below 10 means that the difficulty level has become relatively easy and more solutions are being added to the network. The new time interval is then doubled to the current time interval. So that no new solution can be added to the network in less than 10 minutes on average.

Bitcoin currency is limited to 21 million

One controversial issue with Bitcoin is that over time, the amount of Bitcoin currency will be limited to 21 million. Which no longer grows. Every 4 years the total number of bitcoins will halve, and by 2140 the total number of bitcoins will stop at 21 million, which will never increase.



If the price of Bitcoin goes up in the near future a small portion of Bitcoin may be enough to buy a Toyota Pazoro. Each bitcoin can be divided into 100 million parts, which is called 'satoshi'. Thus, the total bitcoin unit will be 2,100,000,000,000,000 ঃ 2.1 quadrillion or 250.699 or 250.9. Which may be due to several reasons.

First of all, this number is much smaller than 264-1. And R244-1 is the largest number of zero integers among the standard integers that can be held on a computer.

Second, the number 250.90 is slightly smaller than the largest possible integer in the floating point representation mode used in computers. Floating point representation is a type of binary version of scientific notation. In decimal number management, computers use integers as well as floating point representation formats. Such numbers can be presented fairly accurately, despite differences in scientific notation.

Since floating point encryption is a type of binary encryption, so when 9.625 is written on the computer, the computer then stores 1.001101 * 1011 or 0100000000100011 0100000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 -precision serialized form) shows the same result. ‘High Precision’ is the amount of data that is stored by installing floating points, while presenting the data correctly without wasting any extra bit while reading the data.

The number of bits of a simple number without the index of the number in 'High Precision Form' is 52. This means that floating points in high precision form are large enough to store integers up to 253, and if the number exceeds this, the digits will start to cut at the last stage. And, considering the index, Bitcoin's 250.9 satoshi is just a little less than the maximum number. This is how the ‘scarcity’ of Bitcoin is maintained in quantity constraints.

Moreover, is floating point value so important despite having integers? This is because many higher programming languages, such as JavaScript, do not publish low quality ‘floating points’ and ‘integer representations’. Moreover, if Satoshi Nakamoto had chosen 210 million instead of 21 million, bitcoin programming in many languages ​​would have been more difficult than it is today.

Fred Ersham, co-founder of Coinbase, the website that manages bitcoin transactions, said in an interview with the journal Top of Mind, published in March 2011 on global macro research by Goldman Sachs Global Investment Research;

“It is true that Bitcoin has a number of limitations. But that's not to say Bitcoin's supply will end. This is a myth. Bitcoin is divisible by 6 decimals. That is, a much larger number of units can be created, which is enough to be used as a currency for Bitcoin. And even more can be done if needed. Which will require 51% of the network's computing power users to change their software and accept it. "

“Software has changed several times in the past. Such changes have been discussed in developers' forums, and eventually the mining community - who maintains the entire network - has reached a consensus. "