Understanding Bitcoin Mining Software And Blockchain Proof of Work Consensus

Bitcoin mining is a lucrative but difficult activity to undertake. It has become extremely popular with the appearance of several cryptocurrencies. Bitcoin (BTC) is the largest and most valuable digital asset that can be exploited. Although there are also other important cryptocurrencies that require mining like Litecoin (LTC) or Ethereum (ETH).

The general BTC protocol states that anyone is free to extract cryptocurrencies but, the energy costs and the devices and software used are high. So the process is extremely competitive. This is why there is a continuous evolution in Bitcoin's mining hardware and software used for the process, so that it makes the miners' work easier.

There are several popular devices associated with mining, such as ASICs and GPUs, but the software part is often overlooked.

The main function of these software programs is to run the algorithms that help miners solve the complex puzzles needed for mining. Although there are several large ones, BFGMiner is one of the best and most popular mining programs. To fully understand how BFGMiner works, it is essential to understand what Bitcoin mining is and exactly how it is done.

What is Bitcoin Mining?

Bitcoin mining is a mechanism used to confirm new Bitcoin transactions. As well as to introduce new BTCs into the network through rewards paid to miners. Through mining, certain user groups are also encouraged to ensure the safety of the system.

The technology that drives Bitcoin is known as blockchain, a decentralized ledger that contains the records of all transactions on the Bitcoin network. Blockchain consists of a “block chain” that serves as batches for the activities entered in the ledger. To update this ledger, you must add new blocks containing new business transactions to the existing block.

This process ensures that these transactions are confirmed and outstanding payments are made. The idea behind this technology is to ensure a value system without trust, without permission, transparent and independent of central authorities. However, for a system to be truly reliable and transparent, its users need a way to verify that transactions have occurred.

They must also accurately account for additions and deductions to network node balances. To ensure this, consensus occurs at every node, no matter how many there are. When each node has agreed which version of the blockchain is exact, that version is added to the existing copy that each user has.

There is a consensus protocol, known as “proof-of-work” mechanism, which ensures accurate validation of transactions.

This form of consensus is intentionally designed to be difficult, in order to stabilize the number of blocks that are added to the blockchain each day. Each block must contain proof-of-work, verified by other nodes in the Bitcoin network before it can be validated.

What is the Proof-of-Work (PoW)?

A PoW is a piece of data that shows that a node has successfully performed the work required to add new data to the system. It is primarily used to deter spam attacks, distributed denial-of-service (DDoS) attacks, and other malicious invasions. Although the term was first coined in 1999, it was only adapted for financial use in 2004 by Hal Finney.

In 2009, the mechanism was adopted by Satoshi Nakamoto, the anonymous creator of Bitcoin, for use as an official consensus protocol. Subsequently, other cryptocurrencies such as Ethereum (ETH) adopted the consensus protocol of PoW for use on their platforms.

In the Bitcoin network, each new block has a SHA-256 hash value that acts as its unique identifier. The hash of each block must start with a certain number of zeros and the miners have the task of calculating it. The difficulty of this task varies with each block, as miners have to go through several billion obstacles to find the solution. To achieve this, miners use ASIC devices in conjunction with software such as CGminer and BFGMiner.

Bitcoin Mining Software

Although Bitcoin's mining process is carried out by powerful mining devices, the mining software connects the miners to the blockchain and the mining pools. It also facilitates the delivery of work to the miners, as well as the reception of finished work by the blockchain.

This inlet and outlet monitoring is a critical part of the mining process. Without this feedback, the miners cannot communicate with their mining pool or blockchain even after PoW has been resolved.

The mining software also displays statistics such as fan speed, hashrate, temperature and average mining speed. Although there are several Bitcoin mining programs available. BFGMiner is considered one of the best in the market.

BFGMiner

BFGMiner is software used to mine Bitcoin on various platforms including Windows, Linux and Mac OS. It is very similar to CGminer but focuses primarily on use with ASIC devices, a more cost-effective connection than using a GPU. The software is written in C and works as a modular ASIC, GPU, CPU and miner FPGA that supports OpenWrt compatible routers.

BFGMiner has made many lists as the best mining software for its efficiency, ease of use and unique features. Some of its unique features are highlighted below:

  • The software supports the rearrangement of ADL devices using the PCI bus ID, mining with OpenCL free table/LLVM, integrated fan control and overclocking.
  • BFGMiner allows users to mine multiple cryptocurrencies simultaneously, using multiple pool strategies such as load balancing and balancing. This is achieved by allowing multi pooling and pool tracking on the same network, as well as independent pool tracking on different networks.
  • The BFGMiner software supports the use of multiple algorithms such as SHA-256 used by Bitcoin and Scryptused by Litecoin. The software also allows users to run these multiple algorithms at the same time. Users can also assign the algorithm based on their own mining objectives. This feature also works in balancing strategies; however, only CPU, OpenCL, and Proxy drivers currently support multiple concurrent algorithms.
  • BFGMiner's Stratum extensions allow users to share control of mining algorithms with the mining pool, in accordance with mining objectives.

Conclusions

Bitcoin mining is a profitable and resource-intensive activity that is necessary for the maintenance of the Bitcoin network. For mining to be successful, a combination of efficient Bitcoin hardware and software must be used. When it comes to mining hardware, ASICs have proven time and again to be the most powerful mining devices.

The software, on the other hand, offers more options, making it more difficult to choose the best one. However, there are some mining software that are considered among the best and BFGMiner is one of those applications.

In addition to the unique features of BFGMiner, it saves miners resources by eliminating connections to inaccessible pools. It is also easy to use and shares some similarities with CGMiner such as the text-based interface with clearly arranged options.

As time goes by, there may be better BTC mining software on the market, leading to even better results for the miners.

[FREE] Get Our Best Crypto Trading, Mining & Investing Hacks:

*Action Required* Enter Your Email To Get Insight For Trending Coin News & Reviews

I will never give away, trade or sell your email address. You can unsubscribe at any time.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

two × one =