hello over the next few minutes we're going to provide a detailed explanation for how the algorithm behind Bitcoin mining works We'll show you where to find the information that goes into the hashing algorithm and walk you through a spreadsheet we created that theoretically could mine Bitcoin though practically is far too slow The spreadsheet can be downloaded by clicking on the link in the video description so the main goal in bitcoin mining is to take the 160 character input message run it through an algorithm or series of mathematical operations and (fart sound) get a 64 character output that meets a certain criterion and what you're doing in the mining processes is trying to guess a component of the 160 character input message so that the output starts with a certain number of leading zeros Once that's been accomplished that block has been mind and the bitcoin miner receives a reward which is currently 25 bitcoins Bitcoin mining uses two rounds of secure hash algorithm 256 also known as SHA 256 to convert the original message into the output the one catch is that the original bitcoin message is too long so it actually takes two rounds of sha 256 to convert the original message and then one additional round of SHA 256 on the output of the first two rounds for a total of three rounds and as will discuss in more detail each round of SHA 256 has 64 steps here are the components to the input message you have the version which is the black version number the previous block which is the hash of the previous block Merkel route which is the hash of all the transactions in the block that you're mining; the time which is an approximate time stamp for when the block has been mined bits which represent the target difficulty of the block being mined and the nonce which is the random guess that you use to try to produce an output that meet the criteria rights once you have all that lets get started on preparing the message so first the component of the message are converted into hexadecimal and then the rearranged in something called little endian format which you can see here with the bits you one little two little Three Little endians and you can see how it is applied to the entire input message these are then combined to give you the full message then you can one convert them to hexadecimal that is added to the and the message and finally a bunch of zeros are added to pad the message into a size that is the smallest multiple of 512 taking into account the final portion a message which is the size of the message in hex which is added to the now to get this message ready for the main hash algorithm you have to process it as follows: the first sixteen blocks a text characters are what they are the remaining forty blocked number seventeen 364 are reproduced by having a block from sixteen blocks prior the block from seven blocks prior and then adding jumble bits from a block from fifteen books prior and jungle bits from block two books per you can actually see the juggling functions within the body this bridge 9064 block message has been successfully processed for the main hash algorithm the main hash starts with an initial values and a plot to be X characters which are provided by the NSA we refer to these a through each and simple partner hash algorithm is as follows: newbie is old a new season will be new diesels the new episode he knew Jesus Afghan new-age is all T you'll notice that we did not mention what new a want new ER and we also did not at any a message to this here's how that's addressed so new a is equal to the sum love the message which we've noticed W another constant from the NSA denoted as K old each the majority figure which is based on old AB and C the choose figure which is based on old EFG john bobbitt to the old a and job it to the old E now for new be that's equal to the sum love W from above K from above old be old each the Jews figure and job it's a bold the we now have a new value for aid to reach this process is then repeated another sixty three times to produce a final value for a to reach and then finally the output from this round is produced by adding the final values and a through each to the original values a pic to reach but like we said the big win message is too long so we need to do another round shot 256 on the second half of the message the only difference is that instead of starting with a3 from the NSA we start with the output from the previous round we can do to sixty four rounds like which is described and add the final value fee to reach from this round to the initial to reach to get the output for this round this new output becomes the message for the second shot 256 RAM it is padded in a similar manner to what was done previously and it is also run-through shot 256 if the output meet the criteria array that block has been successfully mined not the nazis changed and this whole process is repeated so here's the actual spreadsheet that we created the blue sails appeared these your mean imports this is where you entering the bloc information with not sell being where you and your random guess to produce the block action yellow that starts with enough leading zeros you can see what happens when we change that knocks how the block ash is now changed without leading zeros in there over to the right to the blue sails you can see how we combine this information into the message below the blue sails we show the output for each other three rounds shot 256 the black cells identify calculations and green cells I don't find links between sheets here on the message tab you can see how we process the wrong message from the Main tab to prepare to be run through shot 256 you can see how the original message is split into the first two rounds min starting in room 132 the output from the first two rounds becomes the message printer and then finally on the hash tab this is where we actually perform the main hashing algorithm that we described earlier in the video and there you have it how to mine goings with an Excel spreadsheet get out there make it rain from bitcoins you know with spreadsheet thanks for watching