More Examples

“Bitcoin uses a proof-of-work consensus algorithm.”

“What is the best hashing algorithm to mine?”

“The bitcoin algorithm incorporates what is known as network difficulty.”

Definition(s) from the Web

  1. Bitcoin mining uses the hashcash proof of work function; the hashcash algorithm requires the following parameters: a service string, a nonce, and a counter. In bitcoin the service string is encoded in the block header data structure, and includes a version field, the hash of the previous block, the root hash of the merkle tree of all transactions in the block, the current time, and the difficulty. Bitcoin stores the nonce in the extraNonce field which is part of the coinbase transaction, which is stored as the left most leaf node in the merkle tree (the coinbase is the special first transaction in the block). The counter parameter is small at 32-bits so each time it wraps the extraNonce field must be incremented (or otherwise changed) to avoid repeating work. The basics of the hashcash algorithm are quite easy to understand and it is described in more detail here. When mining bitcoin, the hashcash algorithm repeatedly hashes the block header while incrementing the counter & extraNonce fields. Incrementing the extraNonce field entails recomputing the merkle tree, as the coinbase transaction is the left most leaf node. The block is also occasionally updated as you are working on it. Source
  2. Consensus algorithms are a decision-making process for a group, where individuals of the group construct and support the decision that works best for the rest of them. It’s a form of resolution where individuals need to support the majority decision, whether they liked it or not. In simple terms, it’s just a method to decide within a group. Let me clear it up with an example. Imagine a group of ten people that want to make a decision about a project that benefits them all. Every one of them can suggest an idea, but the majority will be in favor of the one that helps them the most. Others have to deal with this decision whether they liked it or not. Now imagine the same thing with thousands of people. Wouldn’t that drastically make it way more difficult? Consensus algorithms do not merely agree with the majority votes, but it also agrees to one that benefits all of them. So, it’s always a win for the network. Blockchain consensus models are methods to create equality and fairness in the online world. The consensus systems used for this agreement is called a consensus theorem. These Blockchain consensus models consist of some particular objectives, such as: Coming to an agreement: The mechanism gathers all the agreements from the group as much as it can. Collaboration: Every one of the group aims toward a better agreement that results in the groups’ interests as a whole. Co-operation: Every individual will work as a team and put their own interests aside. Equal Rights: Every single participant has the same value in voting. This means that every person’s vote is important. Participation: Everyone inside the network needs to participate in the voting. No one will be left out or can stay out without a vote. Activity: every member of the group is equally active. There is no one with more responsibility in the group. Source
  3. In mathematics and computer science, an algorithm is a finite sequence of well-defined, computer-implementable instructions, typically to solve a class of problems or to perform a computation. Algorithms are always unambiguous and are used as specifications for performing calculations, data processing, automated reasoning, and other tasks. Source

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