Mike> There's no actual digging involved. Think back to

our video on hashing - so a hash function takes a message of any length and

returns a fixed length hash which hopefully looks quite random right so if

you change even a little bit of your message the whole hash changes, so this

is how Bitcoin mining works right in brief... So we have a block and at the top

of the block is the hash of the previous block and a number right which we're

going to call our nonce this is a number we're making up let's start at 1 and go

up and then here we've got all the transactions so transactions - one of

which will give me some bitcoins because I'm the miner. The way this works is I

start with a random number here and then I hash this entire thing and I get a

hash out the bottom here. To mine successfully this hash needs to be very

very small so let's say for example it has ten leading zeros as an example if I

successfully pick a number where when I hash this entire thing including the

number it has ten leading zeros I've successfully mined that Bitcoin. Now

that's quite unlikely you've got to think that each zero & one has a roughly

50% chance of being a one so to get one leading zero it's going to be about 50%

of the time two leading zeros about 25% of the time and so on the more leading

zeros we require the harder this process is. So it doesn't happen yeah the first

time I pick a one I hash it and it doesn't work so what I do is I go to 2

and I hash it again and I get a totally different hash which maybe has a

different number of leading zeroes and I go "does this does this work?" no, ok so 3, 4

5, 6, 7, 8, 9, 10 and so on and I just keep churning away with these random numbers

in this "nonce" field here incorporating any transactions I've received in the

meantime until I get this kind of golden hash that I've been looking for which is

very very small so lets say 0, 0, 0, 0, 0, 0, 0, 0, 0, 0 some

numbers say 1 0 1 1 and something like that right now

this is sha-256 in the case of Bitcoin so it's 256 bits long now as soon as I've

done that I go well brilliant I've got some bitcoins i transmit this to the

network and everyone sees this and goes cool and then they take this hash and

they put it in the next block and start mining on that one as well with new

random numbers so every time someone stumbles across a

hash which is small enough that's when they've mined the Bitcoin right and so

that's how the difficulty of a network is changed - you just change the

threshold of number of zeros or size of your hash that you need to be below in

order to be successful every couple of thousand blocks the network will look

at how long it took and if like a bunch more miners have appeared so it's

actually starting to get a little bit too easy they'll they'll increase this

difficulty such that hopefully a Bitcoin is mined

roughly every ten minutes now of course this process is random so

it might be less, might be more but on average... If a bunch of miners

disappeared suddenly it's taking 50 minutes to mine a

Bitcoin (Block?) they'll just reduce this threshold so that you can mine that

little bit more easily. The number of bitcoins that a miner is awarded is halved

every so often as well - so I think is it at 12.5 at the moment so I will have

sort of plus 12.5 for Mike in here as sort of my benefit of being the miner so

this will only ever get actually put into the blockchain if I'm the one that

finds this hash otherwise unfortunately it'll be someone else's name in here

Sean> we've sat here and watched Beast churn through billions of password hashes -

How hard can it be to come up with this number?

Mike> As hard as they need it to be

you've got to think that for all the miners on earth at least a lot of them

have got dedicated hardware many trillions of hashes and they're still

only doing it every 10 minutes right it's not easy to do

and they can just keep making this more difficult until it takes about ten

minutes. In some ways you can't make the problem more easy by buying more and

more hardware because it will just make itself more difficult for you.

For now most of my contact with it is via a terminal and I ask it to do things it

does them very, very fast. This particular server has four Titan X graphics cards

in it a Titan X is one of the foremost graphics cards there are new....