Bitcoin News - March 18, 2021

Bitcoin Mining Made Easy with Python

Tony Todd March 18, 2021

10 min read

Introduction Bitcoin Mining

Bitcoin mining is a convenient means of earning new Bitcoins by solving complex mathematical transactions to confirm and validate a Bitcoin transaction. It is essentially a process of creating a new Bitcoin. Bitcoin miners use sophisticated and complex computers to confirm and validate every new Bitcoin transaction within 10 minutes. Once a transaction is validated, the block consisting of the transaction data is linked to the blockchain network.

As stated above, Bitcoin mining involves digitally linking new transaction records to the blockchain network. Blockchain refers to the public distributed ledger that contains information or the history of every Bitcoin transaction to date. Simply put, mining is about recording every Bitcoin transaction to ensure the transparency of the blockchain network. It is for this reason that there are no double payments or replication of the same Bitcoin token. Bitcoin mining contributes to the decentralization aspect of blockchain technology, making the payment network trustworthy.

How does Bitcoin mining work?

In a nutshell, to add a new block to the public distributed ledger (blockchain), miners solve complex mathematical problems using special computers. When a miner can solve this problem, a new block (consisting of the transaction information) is securely linked to the blockchain. This is how Bitcoin mining works.

Upon successfully solving the complex mathematical problem and, in turn, adding the new block post validation, a miner is rewarded with new Bitcoins. The mining incentive’s significance is that for every 2016 blocks mined; the mining reward is halved. Originally the mining reward or incentive was 50 BTC, which was halved to 25 BTC in 2012. The last halving occurred in 2020, where the reward for mining was reduced from 12.50 BTC to 6.25 BTC.

What is the benefit of mining Bitcoin?

One of Bitcoin mining’s major benefits is the prevention of double-spending of the same Bitcoin token, which would otherwise result in counterfeiting. Bitcoins are backed by blockchain technology, where every transaction is visible to the public. Also, there is no scope for manipulating the blocks as they are linked chronologically. Thus, making it impossible to delete or tamper with a block.

Apart from this, there are several other advantages of Bitcoin mining, which are as follows:

Miners apart from the block reward also receive the transaction charges, which are included in the block. Thus, when done properly, Bitcoin mining is an excellent source for earning passive income.
Typically, buying a new cryptocurrency involves exchange fees, deposit and withdrawal fees, among others. Considering this, Bitcoin mining is the economic means of acquiring new Bitcoins. Thus, miners can also avoid the Bitcoin trading fees.

Bitcoin Mining with Python

Bitcoin’s blockchain is based on the proof-of-work algorithm. Moreover, mining requires solving complex mathematical problems. After every new Bitcoin transaction, hundreds of miners are bidding to solve the puzzle to earn the block reward. That said, one has to be quick to solve the problem.

Initially, Bitcoins were mined using personal computers. But, to speed up the mining operations, special computers or hardware was introduced. To further simplify the process, miners use an object-oriented, high-level programming language like Python.

Python programming is reliable and easy to learn. Some of the perks of using Python for mining Bitcoins are as follows:

Python offers many third-party software tools, while it has a built-in wide library of tools as well.
Python’s learning curve compared to other mining programs is relatively very small.
It is a free to use, open-source platform.
Operates on simple coding.
Supports compiled, uncompiled, and executable files.
It is very easy to learn and even change the syntax of the code.
Python is user-friendly.
Python can be extended to C++.
Compared to other programming languages, Python offers great speed to maintain the competitive edge.
Bitcoin mining is made easy with only 12 lines of code in Python.

Bitcoin Mining with 12 Lines of Code in Python

from hashlib import sha256
MAX_NONCE_VALUE = 100000000000
def SHA256(text):
    return sha256(text.encode(“asci”)).hexdigest()
def mine(block_number, transactions, previous_hash, prefix_zeros):
    prefix_str = ‘0’*prefix_zeros
    for nonce in range(MAX_NONCE_VALUE):
     text = str(block_number)+transactions+previous_hash+str(nonce)
     new_hash = SHA256(text)
     if new_hash.startswith(prefix_str):
           print(“Bitcoin mined for nonce value of {nonce}”)
           return new_hash

Understanding the process of mining Bitcoins using 12 lines of code in Pythons. It is imperative to decode it to further simplify their use.

hashlib import sha256 is for importing the sha256 library in a mining project.
The next line of the code declares a variable with the maximum nonce up value, which the miner wants to guess. This value can be increased or decreased depending on the mining hardware.
Lines 3 and 4 implies defining a function (SHA256) for generating a hash value.
The fifth line implies defining another function for mining.
Line 6 is for creating another prefix_str variable for storing the Hexa value.
Lines 7, 8, and 9 are for generating a new hash with the aid of SHA256 generated via the third line of code.
Line 10, 11, and 12 compares the prefix of the newly generated hash with the miner’s desired prefix.

Conclusion

Bitcoin miners are rewarded with new Bitcoins for successfully validating a Bitcoin transaction. Thus, Bitcoin mining is a surefire way of not only earning Bitcoins but also any transaction fee of the block. While mining is a complex operation, it can be simplified with programming languages like Python. In this article, we have described the 12-lined Python code for mining Bitcoins.

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