The PoW algorithm used in Frontier and Homestead is called Ethash, and it was created specifically for Ethereum.
The primary reason for constructing a new proof of work function instead of using an existing one was to attack the problem of mining centralisation, where a small group of hardware companies or mining operations acquire a disproportionately ...
Let us start by what they have in common: they are both algorithms for reaching consensus on the blockchain.
Without going into too much details, we need consensus because anyone can create a block; while we only want an unique chain, so we want a way to decide which block we should trust.
Proof of work has the nice property that you can use Bayes' Theorem ...
From reddit post
60 million + 12 million + 18million = ~90million
60 million - is the Pre-sale.
12 million - is the dev fund, 0.2coins per 1 coin sold in the crowdsale.
~18 million - 1 million coins mined per month for 18 months prior to going from POW to POS.
Update #1: 91,018,773.78 (April 25, 2017).
Update #2: 97,017,191.75 (Dec 13, 2017).
The goal of a consensus algorithm in a public blockchain network is to let many different users agree on the current state of the blockchain even though they don't trust each other or any central authority. This is a challenging problem, and until the Bitcoin network was launched, it had remained unsolved.
Bitcoin's solution was to use something called ...
The issuance model is not fixed yet. It is an ongoing discussion whether or not the costs for the consensus needs to be financed by inflation that basically taxes every coin holder or if transaction fees are sufficient.
Please note that the costs for secure consensus are much lower with Casper compared to current proof of work. More details here
For this ...
According to the Ethereum white paper:
The current intent at Ethereum is to use a mining algorithm where miners are required to fetch random data from the state, compute some randomly selected transactions from the last N blocks in the blockchain, and return the hash of the result. This has two important benefits. First, Ethereum contracts can include ...
From StephanTaul on the Ethereum Forums on September, 2014:
There is no maximum. 60,102,216 ethers were created during the sale, plus 2x pools of 9.9% each. 26% of 60,102,216 will be created through mining every year. This means that 15,626,576 will be created every year on top of the 60m and the two pools.
After a while, 15,626,576 ether won't represent ...
Block time in Ethereum's Proof-of-Stake system (called Casper) is being conservatively targeted at around four seconds. Vlad Zamfir of the Ethereum Foundation believes the block time will ultimately end up being much lower (sub-second) while Vitalik is not as convinced on that front. Vlad discusses this in this excellent video explaining Casper: https://...
Short version - POW requires miners or physical computer to be turned on and processing the transaction. This can be inefficient since better computers are created and optimized for mining which may lead to centralization such as bitcoin. Bitcoin maybe viewed as centralized in China by a small group of people holding the mining power which may be greater ...
You can mine ether using your computers graphics card(s) (GPU) as long as it has enough memory to hold and access the DAG efficiently. To be efficient and competitive you should select a card with high total memory bandwidth. You could technically also mine with your CPU, but the current difficulty on the main net is so high that you wouldn't mine ether in ...
It's counterintuitive but PoS is fairer than PoW (as we know it).
Economies of scale: a proportionate saving in costs gained by an increased level of production.
PoW miners have to invest their capital in hardware. The costs of running a mine is composed of fixed costs and variable costs.
Other answers have covered the topic well and 2 things to clarify:
The current issuance rate is known: 5 ETH every ~15 seconds (Bitcoin is currently 25 BTC every ~10mins).
With any changes to Ethereum, such as the transition to PoS, the issuance rate is guaranteed to not increase. But it may decrease, possibly to zero or something much less than 5 ETH, ...
the_truth = Agreed data structure (Block) containing valid future state of the ethereum virtual machine (and related information) as calculated by me using the rules set out in the yellow paper.
rand = 8 byte random number
Proof of Work:
I'll race you to find the hash value of the_truth+rand that is less than
the agreed difficulty level, prize for the ...
After the implementation of Casper, I believe the rate is expected to be fixed and miners will earn from both mining fees and fees offered up in other on-chain tokens or currencies/assets.
However, as Casper is currently in development, everything can and will likely drastically change from here and actual implementation within one year.
At the point of writing this the supply of ether is still "infinite". Every 15 seconds two new Ether are generated.
Currently we are at 107,682,753.47 Ether.
These are from:
Genesis (60M Crowdsale 12M Other): 72,009,990.50 Ether
Mining Block Rewards: 33,168,789.59 Ether
Mining Uncle Rewards: 2,503,973.38 Ether
The change to PoS got delayed a few times ...
No, there is no difference in this case-- they are essentially equivalent. If the tx is orphaned, they should return null, but you should still check the block number because it may have been added to the new chain later than you expect, giving less probability of finality.
There are two primary ways that the existing PoW based consensus algorithm combats mining centralisation.
The first is by reducing losses due to orphaned blocks, which independent miners are more likely to experience.
This portion of the Ethereum mining algorithm, a technique referred to as GHOST, includes the headers only of recently orphaned blocks in ...
A token on Ethereum is basically a balance in an Ethereum contract. A contract could be programmed to issue tokens when it receives its own proof of work. (double sha256
is readily available, since the Ethereum Virtual Machine has a precompiled contract for sha256).
Here's a starter example of a "token" contract.
Note that even though the constructor ...
It is absolutely necessary, because any form of Proof of ... requires those who secure the network to be rewarded.
The goal of any consensus form is to attract many nodes to a game like roulette. The winner can confirm the authenticity of the last block and wins a reward. Because the winners are randomly selected we say that with many confirmations we are ...
Ethereum currently uses a Proof of Work algorithm called Ethash, implementation details of which can be found on the wiki.
The plan is to move to a Proof of Stake algorithm called Casper at some point in the future. Current estimates from Vitalik put the chances of moving to PoS in 2017 at between 50% and 80%.
Further details about Ethereum's proposed use ...
Wouldn't it be possible for a government seeking to destroy the
blockchain just "print out" the money for getting 51%?
But then this isn't any different to the current situation with PoW, whereby government agencies could collude to generate enough hash power to stage an attack. And to generate that hash power they could either requisition ...
Proof of Work like proposed by Satoshi doesn't solve the Two Generals Problem or the more generic Byzantine Generals Problem. It's a probabilistic solution to the Byzantine Generals Problem, which means the confidence that a consensus is reached is growing with every block added to the chain, but it never reaches 100%.
You will need at least a 2GB RAM on your GPU to actually mine. CPU will be extremely hard to make any money unless you use a pool. Here's some resources:
Ethereum uses the GHOST (Greedy Heaviest Observed Subtree) protocol to combat the problem generally associated with short block times.
With lower block times the amount of blocks found will increase and thus more blocks will end up being stale. GHOST combats this by giving blocks that are valid but didn't end up being the head of the chain a ...
In the future there will be move to a proof of stake algorithm called Casper, which will require a hard fork because such changes are not backwards compatible.
There has already been a hard fork: Homestead. Several consensus rules were changed, such as adding the DELEGATECALL opcode and increasing the price of gas for creating contracts via transactions ...
It's necessary, because the miners or "validators" put some money on stake. Here is a description of the finality circle by V Butterin, which gives some good explaination of how it works :
PoW (or in fact any consensus algorithm) can't solve the Two Generals/Byzantine Generals Problem. It can only provide a very high and easily verifiable certainty of a transaction being correct.
A few assumptions are made:
Most miners and node operators act either altruistic (true to the code no matter what comes) or economically egoistic (try to make as ...
Blocks that are fuller, and contain more transactions, both propagate around the network more slowly and take more time for other nodes to validate1. Both of these things increase the chance of a miner's block becoming an uncle and reduce the chance of getting the full block reward.
Miners, therefore, have to decide whether to increase the number of ...