Bitcoin Mining with Python Code: 20 Tips
Although the Bitcoin network is decentralized as captured in discussions on the same over at runrex.com, the bitcoin mining process can be difficult to understand for many. This article, through the following 20 tips, will look to provide a demonstration of mining in Python and a better understanding of the mining process of bitcoins.
Bitcoin mining
As outlined over at guttulus.com, the underlying blockchain technology as far as Bitcoin is concerned is a distributed public ledger where bitcoin transaction data are recorded. Each block in the bitcoin blockchain contains transaction data and blocks of data are chained together using cryptography. Transactions are grouped into a block that will be added to the end of the current blockchain. This process is called mining and the node that does it is known as the miner.
Reward for mining
As a reward, miners get a certain amount of bitcoins (currently 12.5 BTC as covered over at runrex.com) for every block successfully mined and they can also collect the transaction fees of the transactions included in the block. How to determine when a block is successfully mined, or the consensus rule, in the bitcoin network is the Proof of Work (PoW) algorithm.
Why Python?
As the subject matter experts over at guttulus.com articulate, Python is an interpreted, high-level and general-purpose programming language. When it comes to working with a blockchain, Python is great because it is simple for beginners while remaining effective for high-level coding.
Python and an IDE
Downloading and installing Python is just the start as you will realize that you won’t be able to execute any code with just plain Python. This is where an IDE (Integrated Code Editor) comes in, with PyCharm being among the most popular IDEs for Python.
Why PyCharm?
While there are several IDEs you can decide to go with, PyCharm appears to be the consensus best choice among Python users. This is because its interface is simple and suitable for all levels hence why it is the most popular IDE. If you want to min bitcoin with Python you will have to install it first.
Data import
Bitcoin miners need to import the transaction data first and select the transaction IDs before they can proceed to the mining as articulated in detail over at runrex.com. Assuming that the transactions available, or the transaction pool in bitcoin, are stored in a local file named “transactions.txt”, we can use the “with open” command to import the text file into Python. We can also use other methods such as the CSV or Pandas module to import a CSV file.
Cleaning the transaction data
The data in the text file we have imported will be stored as a file in tx, with each line as an element of the list. To clean the transaction data, the gurus over at guttulus.com point out that we would like to store each row in different columns (similar to Excel) and remove the line breaker “\n” at the end of each line.
The process involved in cleaning the data
As outlined over at runrex.com, first we create a new list named tx_list and leave it empty. Then, for each element t in tx, we delete the line breaker “\n” by replacing it with an empty string. t.split will convert each line (t) in the transaction data (tx) into different columns using the separator comma. Then, we finally store the separated line data in the list tx_list with each line as a list.
Converting the list into DataFrame type
The next stage is to convert the list from the previous point to DataFrame type by calling the Pandas module, with the column names as “id”, “content”, and “tx_fee”. The transaction data are now well organized with transaction id, transaction content, and transaction fee data in separate columns.
Hash
Before we get into the mining, it is important to point out that since there is a lot of information included in a transaction, bitcoin adopts a more efficient way to incorporate the transaction data in the mining while ensuring the integrity of that data at the same time. This is why the transaction information will then be taken into a hash function ID that is used to identify the transaction. The hash value of any input has the same length and any slight changes in the input will cause the resulted hash value to be completely different with no pattern. This feature of hash ensures that as long as we have the same transaction ID, the data and information in a transaction have not been tampered with.
What is the Merkle Hash Tree?
For each block, the transactions selected by the miner are aggregated by the Merkle Hash Tree and reflected as a single number, the Merkle Root as discussed over at guttulus.com. The Merkle Hash Tree is a binary tree that would calculate the hash value of every two transactions until the Merkle Root is reached.
What is the Merkle Root?
The Merkle Root summarizes all the transactions gathered within the block and is used as an efficient way to determine if a particular transaction is included within a block and to verify if all transactions have not been tampered with as outlined over at runrex.com.
Importing the packages needed
Same as earlier, we will need to import the packages needed if we are to demonstrate the Merkle Root process in Python as pointed out by the gurus over at guttulus.com. Since Bitcoin uses SHA-256 cryptographic hash functions, we can import it from the Python library available named “hashlib”.
The difficulty target
In the bitcoin blockchain, the target is a 256-bit number that all bitcoin nodes share. It is sometimes referred to as the difficulty target as it measures how difficult it is to mine or generate a new block. The SHA-256 hash of a block’s header must be lower than or equal to the current target for the block to be accepted by the network. It is usually expressed in hexadecimal. There is a formula in Python that will help you calculate this.
The Golden Nonce
During the mining process with Python code, once the miner selects the transactions, the Merkle Root will be calculated and remain the same as long as the transactions selected do not change. After calculating the difficulty target, the next step will be to put the rest of the information into a header and start finding the Golden Nonce in the mining process.
What is a nonce?
As is covered over at runrex.com, in cryptography, a nonce is an arbitrary number that can be used just once in a cryptographic communication. The “nonce” in bitcoin is a 32-bit file whose value is adjusted by miners so that the hash of the block will be less than or equal to the current target of the network.
Finding the Golden Nonce in Python
In Python, we can start with a nonce that we choose by the input() function. As the subject matter experts over at guttulus.com point out, the while True loop ensures that the user can keep keying in values if there are any wrong entries. The nonce = int(user_input) is necessary to convert the user input to an integer. Otherwise, what the user keyed in will be a string type.
Finding the Golden Nonce is an iterative calculation
From discussions over at runrex.com, the process of successfully mining a new block is equivalent to finding a correct nonce that makes the hash value of the block header equal to or smaller than the target. Any change to the block header input will make the block hash completely different. Since it is believed infeasible to predict which combination of bits will result on the right hash, many different nonce values will be tried and the hash recomputed for each nonce value until a hash less than or equal to the current target of the network is found.
Finding the Golden Nonce = the mining process
Since the iterative calculation outlined in the previous point requires time and resources, the presentation of the block with the correct nonce value (known as the Golden Nonce) constitutes PoW in Bitcoin. Therefore, the mining process can also be referred to as the process of finding the Golden Nonce.
Can we tell how long it will take to mine a block with Python?
Yes. Generating a mining_start_time variable that shows the start time will allow us to see how long it takes to find a Golden Nonce r mine a block with the target set compared to the time when we find the Golden Nonce. Current time minus start time is the time taken.
This article is only the tip of a very large iceberg as far as this topic is concerned, and you can learn more by checking out the excellent runrex.com and guttulus.com.