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Bitcoin Mining Explained Like You re Five: Part 2 Mechanics. Sep 2, Before moving forward we should take a moment to learn about hash functions since they are used all throughout the Bitcoin protocol. To put it simply, a hash function is just a mathematical algorithm that takes an input and turns it into an output.

For example, suppose we have an algorithm which just adds. Block hashing algorithm Bitcoin Wiki Dec 12, Bitcoin mining uses the hashcash proof of work function; the hashcash algorithm requires the following parameters: a service string, a nonce, and a counter.

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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. Bitcoin mining the hard way: the algorithms, protocols, and bytes Feb 23, Because of the structure of the Merkle hashexplained below, this allows the hash for the entire set of transactions to be recomputed easily. Finally, the block header is built.

The process is almost the same as Bitcoin mining, except you use the scrypt algorithm instead of sha256d.