CCE Cryptocurrency Mining Principles 3 — Questions and Answers
Question 1: What metric measures the total computational power of a cryptocurrency network?
- Block time
- Hash rate (Correct answer)
- Difficulty target
- Mempool size
Correct answer: Hash rate
Hash rate (measured in TH/s, PH/s, or EH/s) represents the total number of hash computations performed per second across the network.
Question 2: In a mining pool, what does 'PPS' (Pay Per Share) mean?
- Miners are paid only when the pool finds a block
- Miners receive a fixed payout for each valid share submitted (Correct answer)
- Miners are paid based on pool luck over time
- Miners share equally regardless of contribution
Correct answer: Miners receive a fixed payout for each valid share submitted
PPS pays miners a set amount for every share submitted, transferring block-finding risk to the pool operator.
Question 3: What is the 'target' in Bitcoin's Proof of Work system?
- The minimum transaction amount a miner must process
- A 256-bit number that a valid block hash must be less than or equal to (Correct answer)
- The number of transactions required per block
- The minimum hash rate a miner needs to participate
Correct answer: A 256-bit number that a valid block hash must be less than or equal to
The target is a threshold value; a block is valid only if its SHA-256d hash is numerically below this target.
Question 4: Which type of mining hardware offers the highest energy efficiency for Bitcoin mining today?
- GPUs
- CPUs
- FPGAs
- ASICs (Correct answer)
Correct answer: ASICs
ASICs (Application-Specific Integrated Circuits) are custom chips built solely for mining, offering orders of magnitude better efficiency than general-purpose hardware.
Question 5: What is 'merge mining' (Auxiliary Proof of Work)?
- Combining multiple mining pools into one
- Simultaneously mining two compatible blockchains with the same work (Correct answer)
- Merging ASIC and GPU mining in one rig
- A protocol for switching between coins automatically
Correct answer: Simultaneously mining two compatible blockchains with the same work
Merge mining allows miners to mine a parent chain and one or more auxiliary chains simultaneously without extra computational effort.
Question 6: What does 'difficulty retargeting' every 2016 blocks accomplish in Bitcoin?
- Resets miner rewards to initial levels
- Adjusts mining difficulty to maintain approximately 10-minute block intervals (Correct answer)
- Redistributes accumulated fees to miners
- Updates the list of valid mining software
Correct answer: Adjusts mining difficulty to maintain approximately 10-minute block intervals
Bitcoin adjusts difficulty every 2016 blocks (roughly 2 weeks) so that blocks continue to be found approximately every 10 minutes.
Question 7: What is a 'share' in the context of pool mining?
- A fractional ownership token of the mining pool
- A proof of work that meets a lower difficulty threshold submitted to the pool (Correct answer)
- An NFT representing mining contribution
- The portion of block reward allocated to each miner
Correct answer: A proof of work that meets a lower difficulty threshold submitted to the pool
Shares are partial proofs of work at reduced difficulty, allowing pools to measure each miner's contribution before a full block solution is found.
CCE Cryptocurrency Mining Principles 3
What metric measures the total computational power of a cryptocurrency network?