CSE1006 Study Guide - Mining Pool, Bitcoin, Bitcoin Network

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Let"s say you spent to buy a new bitcoin mining rig. Now, you expect that you will find a block in about 14 months with this rig. So, you could say that the expected revenue of this box is about per month not considering the electricity. But mining is a random process, so you don"t know when you"re going to find the next block. Looking at the probability distribution of finding a new block during the first year, the variance is pretty high because the expected number of blocks you"re going to find is low. 42. 4 % -> you will not find a block. 5. 6% -> you will find more than 3 blocks. But there"s a big chance that you"ll make nothing at all. For a small miner, mining is essentially based on chance. Group of miners get together and form a pool. They will attempt to mine a block for the same recipient, called pool manager.

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