Popular Science Corner 10 | What is Ethereum Mining?

Anything that involves coins must be inseparable from mining. In the Ethereum network, if you want to obtain Ethereum, you must also achieve it through mining. Then, when it comes to mining, it must be inseparable from the consensus mechanism.

The consensus mechanism of Bitcoin is PoW (Proof of Work). To put it simply, more work pays more. The more computational work you pay, the more likely you will be the first to find the correct hash value, and the more likely you will be rewarded with Bitcoin.

However, Bitcoin's PoW has certain defects, that is, its processing speed of transactions is too slow, and miners need to constantly collide with hash values ​​through calculations, which is wasteful and inefficient.

In order to make up for the shortcomings of Bitcoin, Ethereum proposed a new consensus mechanism called PoS (this is an abbreviation in English, meaning "proof of equity", and it is also translated into "proof of equity").

To put it simply, PoS is actually the same as its literal meaning: equity, equity, the more coins you hold, the more equity you have, and the higher your equity. Ethereum’s PoS means: the more coins you hold, the longer you hold coins, the less difficult your calculations will be, and the easier it will be to mine.

It is true that the consensus mechanism of Ethereum is PoS, but PoS is only a plan or goal at the beginning of the release of Ethereum. The current consensus mechanism adopted by Ethereum is also PoW, which is the PoW of Bitcoin.

In the initial setting of Ethereum, Ethereum hoped that through phased upgrades, PoW was still used in the early stage to build a relatively stable system, and then PoW+PoS was gradually adopted, and finally fully transitioned to PoS.

There are two points of information involved here:

The first information point is that the PoW adopted by Ethereum (that is, the PoW of Bitcoin), but it is not exactly the same, there are differences;

The second point of information is that in the initial setting of Ethereum, it is hoped that the transition from PoW to PoS will be realized through phased upgrades.

In the following content, let's explain these two information points one by one.

1. The consensus mechanism currently adopted by Ethereum is also PoW. How is it different from Bitcoin’s PoW?

To put it simply, the mining difficulty of Ethereum can be adjusted, but the difficulty of Bitcoin mining cannot be adjusted. This is like our college entrance examination. Because the teaching situation and the number of students are different in each province, the college entrance examination is divided into national papers and independent propositions for each province. Ethereum said: I am in favor of making questions by region in this way! But Bitcoin said: No, it must be the same roll across the country, and everyone has the same difficulty!

Bitcoin uses computer computing power to do a large number of hash collisions, enumerating various possibilities to find a correct hash value. As for the Ethereum system, it has a special formula to calculate the difficulty of each subsequent block. If a block is verified faster than the previous block, the Ethereum protocol increases the difficulty of the block. By adjusting the block difficulty, you can adjust the time it takes to verify a block.

The Ethereum protocol stipulates that the dynamic adjustment method of the difficulty is to make the time interval for creating new blocks in the whole network be 15 seconds, and the network takes 15 seconds to create a blockchain. In this way, because the time is too fast, the synchronization of the system is greatly improved , it is difficult for malicious participants to mobilize 51% (that is, more than half) of the computing power to modify historical data in such a short period of time.

2. In the initial setting of Ethereum, it is hoped that the transition from PoW to PoS will be realized through phased upgrades.

Dating back to 2014, when Ethereum was released, the team announced that the release of the project would be divided into four phases, namely Frontier (frontier), Homestead (homestead), Metropolis (metropolis) and Serenity (tranquility). The consensus mechanism of the first three stages adopts PoW (workload proof mechanism), and the fourth stage switches to PoS (stake proof mechanism).

On July 30, 2015, the first phase of Ethereum, "frontier", was officially released. This phase is only applicable to developers. Developers can write smart contracts and decentralized application programs DAPP on the Ethereum network, and miners start Enter the Ethereum network to maintain network security and mine to get Ethereum. The bleeding edge version is like a beta version, proving whether the Ethereum network is reliable or not.

On March 14, 2016, Ethereum entered the second stage of "homeland". In this stage, Ethereum provided a wallet function, allowing ordinary users to experience and use Ethereum conveniently. There is no obvious technical improvement in other aspects, it just shows that the Ethereum network can already run smoothly.

In September 2017, Ethereum has entered the third stage "Metropolis". "Metropolis" consists of two upgrades of Byzantium and Constantinople. The goal of this stage is to introduce a hybrid chain model of PoW and PoS to prepare for the smooth transition from PoW to PoS. The recent popular "Ethereum Constantinople Upgrade" has laid a good foundation for the transition from PoW to PoS.

3. How to calculate the rewards obtained from Ethereum mining?

How much reward will Ethereum mining get? The miners who win the block creation competition will get the following income:

1) Static reward, 5 Ethereum;

2) The fuel cost spent in the block, that is, Gas, which we talked about in the previous issue;

3) As a part of the block, it includes the extra reward of "uncle block". Each uncle block can get 1/32 of the mining reward as a reward, that is, 5 multiplied by 1/32, which is equal to 0.15625 Ethereum.

Here we briefly explain the "uncle block". The concept of "uncle block" was proposed by Ethereum. Why should we introduce the concept of uncle block? This also starts with Bitcoin.

In the Bitcoin protocol, the longest chain is considered infallible. If a block is not part of the longest chain, then it is said to be an "orphan block". An orphaned block is a block that is also legitimate, but may have been discovered a little later, or the network transmission was a little slower, and it did not become part of the longest chain. In Bitcoin, orphaned blocks are meaningless and will be discarded later, and the miner who found the orphaned block will not receive mining-related rewards.

However, Ethereum does not believe that orphaned blocks are worthless, and the Ethereum system will also reward miners who find orphaned blocks. In Ethereum, orphan blocks are called "uncle blocks" and they can contribute to the security of the main chain. Because the block interval of more than ten seconds in Ethereum is too fast, it will reduce the security. By encouraging the reference to uncle blocks, the reference main chain can obtain more security guarantees (because the orphan blocks themselves are also legal), and the rewards are paid to Uncle blocks can also motivate miners to actively mine and actively quote uncle blocks, so Ethereum believes that it is valuable.