Definition: A market maker (or liquidity provider) is a person or program which buys and sells tokens and securities. In contrast to “normal” traders a market maker is always available for buying or selling. Its purpose is to provide permanently liquidity and allow other traders to buy and sell at a market price.
In this post we describe how to calculate an verify a Bitcoin block hash manually. We need to follow five easy steps to calculate the block hash.
If you want to try it out, you can use our online bitcoin block hash calculator.
Input Values of a Bitcoin Block Hash
But before we start with the calculation we take a look at the input values.
The SHA-256 hash function takes six inputs in order to calculate the block hash.
|Version||Tells us the block version number. Is also used to participate in polls about protocol changes|
|Previous Block Hash (hashPrevBlock)||256-bit hash of the previous block header|
|Merkle Root hash (hashMerkleRoot)||256-bit hash of the Merkle root. The Merkle root is based on all transactions in a block.|
|Time||Block timestamp as seconds since 1970-01-01T00:00 UTC|
|Bits (difficulty)||Target to be met by the block hash|
|Nonce||32-bit number used to find the correct block hash in PoW|
Where to get the data from?
Blockchain data are public. If you install a node you will be able to request the data from your node.
But there are also public services called block explorers which provide the data. Here is a list of block explorers you can use:
However, there is on caveat. The format in which the data are provided can be pretty messy. Some block explorers display the data in hex values others in decimal values. This requires a little cleanup before the actual calculation can begin. Some block explorers even give imprecise data like a truncated date without the seconds.
We take example data from the block number 600,000.
|Input||Value (original)||Value in hexadecimal|
|Previous Block Hash (hashPrevBlock)||00000000000000000003ecd827f336c6971f6f77a0b9fba362398dd867975645||00000000000000000003ecd827f336c6971f6f77a0b9fba362398dd867975645|
|Merkle Root hash (hashMerkleRoot)||66b7c4a1926b41ceb2e617ddae0067e7bfea42db502017fde5b695a50384ed26||66b7c4a1926b41ceb2e617ddae0067e7bfea42db502017fde5b695a50384ed26|
|Time||2019-10-19 02:04:21 as timestamp: 1571443461||0x5DAA5305|
Step 1: Converting into little-endian
All values need to be converted into little-endian hex format. Usually block explorers or hex calculators provide the data in big-endian. Little-endian means that the least significant byte is on the left side. (In big-endian it is on the right side)
|Input||Value in little-endian hexadecimal|
|Previous Block Hash (hashPrevBlock)||45569767D88D3962A3FBB9A0776F1F97C636F327D8EC03000000000000000000|
|Merkle Root hash (hashMerkleRoot)||26ED8403A595B6E5FD172050DB42EABFE76700AEDD17E6B2CE416B92A1C4B766|
Input data from Bitcoin block 600000.
Step 2: Concatenation
The next step is to concatenate all little-endian formatted hash values in the right order. The symbol || means concatenation. As result we receive our rawHex.
rawHex = Version || Previous Block Hash || Merkle Root hash || Time || Bits || Nonce
rawHex = 0000002045569767d88d3962a3fbb9a0776f1f97c636f327d8ec0300000000000000000026ed8403a595b6e5fd172050db42eabfe76700aedd17e6b2ce416b92a1c4b7660553aa5d5ca31517a7ad933f
Step 3: Convert into bits
The concatenated hash value now needs to be converted into binary format. Most hash calculators and libraries distinguish between string inputs and hexadecimal inputs.
Let us consider an example.
The string “2c” would have a binary representation of 0011001001100011. This is derived from the ASCII table.
|Binary ASCII representation||00110010||01100011|
If we interpret “2c” as hexadecimal value its binary representation would be: 101100. And this is exactly what we need.
This step is usually done internal with many hash libraries. The resulting binary number of our rawHex would be too large to display here.
Step 4: Apply SHA-256 twice
On our bit representation of the rawHex we apply the SHA-256 now twice. This means, we first calculate the SHA-256 of the binary representation of our rawHex and then take the result (again as binary) and input it into our SHA-256 function again.
2 x SHA-256: 915fcd96d1c84298a8fbfb9c13a9f7b4760e9056683107000000000000000000
Step 5: Convert to little-endian
The last step is to convert the output of the last step into little endian hexadecimal format. Once this is done, we have your block hash.
Pitfalls when calculating a Bitcoin block hash
If you want to calculate or verify a Bitcoin block hash manually, you need to take care of the format of your input values.
Version: The version can be given as 1, 2, 0x00000002, 0x20000000, or in different values. If the version is given as decimal values like 1 or 2 it needs to be converted into a padded hexadecimal value first (0x00000002). If it is given as hex-value like this 0x20000000, it can be used as input value right away (it still needs to be converted to little-endian thought).
Date: make sure you use the correct date. Some browsers might give you wrong date values, because they apply the wrong time zone. And some block explorers cut off the seconds from their dates.
With this user interface for Ethereum you an easily interact with smart contracts. Simply copy the ABI and the contract address into the respective fields, click “read ABI” and start interacting. You need a Ethereum connection like MetaMask.
In this article we focus on the difference between storage, memory, and stack in Ethereum. We will also give a Solidity code sample and calculation examples.
This calculator converts the bit value into the target for the Bitcoin blockchain.
An extensive explanation of the Bitcoin difficulty and how target, difficulty and bits are related can be found in this article: Bitcoin difficulty and Target.
If you look for the Ethereum mining difficulty explanation, you find it here.
Block Reward Definition
The block reward serves as a remuneration of the miner or block creator for its work. It is therefore part of the incentive structure to keep the network safe.
Explanation: Bitcoin Mining is the process of creating new coins while validating transactions and creating blocks. This is usually done by a proof of work (PoW) algorithm. But there are also other algorithms like proof of stake (PoS), delegated proof of Stake, proof of capacity (PoC), proof of elapsed time (PoET), etc.