Complete Explanation of Mining

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I have 6 miners, all with 3 R9 280x's.

(Yes, not bitcoin mining, but there isn't a general mining stack site and it still uses cgminer so it's relevant)

I've been working on getting them running stable for months, I now run CGWatcher on each miner to manage CGMiner. And I use CGRemote + Teamviewer to keep an eye on all the miners from a central computer.

Anyway, I've been having lots of problems and I feel like what I really need is a better understanding of how mining works. For example: what is a share?

I've tried reading explanations online but none of them make any sense to me, what is a block chain? I'm not a 5th grader, but explain it to me like I am. I understand some things, but not everything and to be able to tackle all the problems, I really need a complete understanding of the mining process.

I understand a decent amount of things, but really the reason I need this is because I recently started solo mining and I need to know what my miners are doing because I'm not constantly getting accepted shares like with pool mining, so how do I even know the miners are working at all? Because I'm not getting anywhere near the payout I should be getting.

I'm currently mining Digitalcoin, which currently has a difficulty of 8, so you can imagine that with 12 MH/s on average I should be making a lot of DGC, but I'm not.

Mark Kramer

Posted 2014-02-03T03:52:48.747

Reputation: 117

1This site isn't really intended to write complete articles on topics, which is what you seem to want. Moreover, since there are lots of existing writings, and none of them seem to be to your taste, why should anyone here expect that their efforts would be better appreciated? It would be better to ask specific questions (one per post) about specific things that you don't understand. – Nate Eldredge – 2014-02-03T04:29:40.013

– Murch – 2014-02-03T10:00:14.790

Nate, I've read them, and they all don't explain everything, or they explain something out of context or base their writings on words without explaining what the words mean first. You were wrong because the answer I accepted was perfect. – Mark Kramer – 2014-02-17T16:51:27.113

Answers

When you mine solo (not in a pool) then your payout is entirely based on solving the current block in the blockchain before anyone else, and collecting the "bounty" on that block. In Bitcoin terms, the block bounty was 50 BTC at the start of the blockchain, and recently decreased to 25 BTC -- it will continue decreasing steadily until all BTC are mined.

The blockchain is the decentralized ledger that makes up a cryptocurrency. An individual block confirms a set of transactions, as well as all of the blocks that came before it (hence block chain). When you are mining, you are attempting to solve these blocks, confirming the transactions that took place within that timeframe, and collecting the bounty associated with the block.

The random and distributed nature of cryptocurrency means everyone is working on the same block at the same time, and the probability of you solving the block first and collecting the bounty is effectively equal to the percentage of the overall hash rate of the network that is being generated by your miners.

The idea of pooled mining is that everyone in the pool contributes their hash rate to a common effort, so that their collective hash rate is able to compete on the scale of the entire network. A share is simply a way of splitting up and distributing this work to be done among the members of the pool. If you are part of a pool that solves a block, and you had 10 shares accepted out of the pool's 100, you would get 10% of the payout regardless of whether your equipment or someone else's in the pool solved the share that ended up being the block solution.

So, for solo mining, I can't really see how you'd need to be using shares unless you are pooling your own miners together as a clustering solution.

With a single solo miner, it needs a full copy of the blockchain to hash against, it needs to be communicating with the rest of the network to update the blockchain copy whenever a new one is found and to inform the network when it solves a block, and then of course it needs the processing power and hardware to generate an effective hash rate.

For multiple miners in parallel, you're on your own for figuring out the best way to have them work effectively for you.

NReilingh

Posted 2014-02-03T03:52:48.747

Reputation: 307

FINALLY a good answer! Why is this absolutely nowhere on the internet anywhere? And why, in gods name, would they close my question? The answer you gave is so valuable and now people won't be able to find it. – Mark Kramer – 2014-02-17T16:48:48.883

Also, yes, I am basically pooling my miners. I have my wallets running on a main computer and all the miners connect to the wallet on that computer and hash against that wallets blockchain. – Mark Kramer – 2014-02-17T16:49:46.700

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mine in a pool, solo mining you're not going to constantly be finding blocks so there are going to be moments with no payout. In a pool with a fair amount of miners there are more chances of finding blocks and more payouts.

zim

Posted 2014-02-03T03:52:48.747

Reputation: 1

1You explained pools badly. – John T – 2014-02-04T00:38:58.160