Bitcoin mining


Bitcoin mining tutorial
Severe mining conditions

This is a multi-part Bitcoin mining tutorial targeting people new to Bitcoin. I wrote this back in 2014, but the same principals apply. The difficulty now is much much higher(as of May 2017 network difficulty is an astounding  533 Billion). Mining conditions seemed severe at 40 Billion and this shows the potential growth of the digital currency.


 Bitcoin mining tutorial Part 1: What is Bitcoin mining and Bitcoin difficulty, how does it affect Bitcoin mining operations?

Bitcoin mining and the Bitcoin network are two different aspects of Bitcoin. The Bitcoin network is distributed peer to peer data sharing and verification service. Let’s put this into a practical easy to explains analogy

The Bitcoin network or nodes are communication platforms passing information back and forth. Let’s assume Bitcoin nodes are the equivalent of physical news channels and the Bitcoin mining is verifying the news is real and worthy of inclusion. So, we broadcast the news (Bitcoin node sends out a transaction) and wait for the news to be verified it is real (Bitcoin mining and verification) and after a certain number of nodes and miners include the (information), you can assume with a large degree of certainty the information or news is valid.

what is a Bitcoin node and what is a Bitcoin miner

Bitcoin nodes relay the information and the Bitcoin mining network verifies the information. This, so far, has worked very well as long as the mining is distributed and not centralized among one central organization.

Bitcoin mining difficulty

Bitcoin Network Difficulty is a representation of how many shares it would take on average to find a Bitcoin block.  Simply, that means you need to complete a certain number of Difficulty 1 shares to find a block on average.

Think of it as scratching lottery tickets. If one out of every 1,000 tickets is a winner on average. The first ticket you scratch might be a winner, or the 2,000 ticket might be. This is referred to in Bitcoin as mining luck. You could buy a winning lotto ticket 5 times in a row or never buy one, but theoretically, if you scratch enough tickets you will come close to 100%.

What is a Difficulty 1 share?

Referred to as Diff1, it was/is the baseline pool mining used to define work accepted.

  • 71.58 MH completes one Diff1 share on average every 60 seconds
  • What is 71.58 MH? = That was about a low end AMD Graphics card from 2012


Network Difficulty / Diff1 shares = minutes to complete a block.

Example 1:

  • Network Difficulty= 1 million (This is where you would know current mining difficulty)
  • Your miner = original ASICMINER USB at 333 MH (this is, of course, obsolete now)
  • (333/71.58) = 4.652 Diff1 shares per minute
  • (1,000,000/4.652)= 214,961 minutes or 149 days on average to find a block.

Example 2:

  • Network Difficulty = 13.46 Billion (insert current mining difficulty of course)
  • Your miner = KNC Neptune at 3.3 TH
  • (3.3*1,000,000) / 71.58 = 46,100 Diff1 shares per minute
  • (13,460,000,000/46,100) = 291,973 minutes or 202.75 days on average to find a block

Diff1 is no longer actively used by pools, because it is not practical to log 46,100 shares per minute for one miner. The reference to Diff1 is still used by everyone, just as multiples.

The pool you mine reports back that you submitted a Diff 1000 share. You did not send back all the shares less than Diff 1000, but when you submitted a Diff 1000 share, you get credit for 1000 shares.

So instead of submitting 46,100 shares per minute you would be submitting (46,100/1000) = 46.1 shares per minute. You still get the same amount of credit, and your miner did the same amount of work as before. You are just filtering shares below Diff 1000 to reduce internet traffic and overall  data logging.

This is the end of Bitcoin mining tutorial Part 1, I hope it makes sense.

I wrote this so average new miner could read it, not so it could be an exact mathematical formula.

Bitcoin Value