Mining

So far, we’ve gone over the structure of the Bitcoin Inu blockchain; this section will focus on how the Bitcoin Inu blockchain is expanded with new blocks. Note that we use the terms nodes and peers interchangeably; a node in Bitcoin Inu is always a peer. A few other quick definitions:

• Mining is the core mechanism that defines by which rules new blocks are created, and by which rules a peer can verify and accept an incoming block.
• Miners are those nodes that propose a new block to be added to the blockchain to other nodes.
• A new block is said to be mined when a miner finds a hash of the block header that is below some threshold that we call the target.

The Bitcoin Inu blockchain algorithm dynamically adjusts the mining difficulty to achieve 60 second average block times, by either increasing or decreasing mining difficulty if previous blocks are observed to be coming in too fast or too slow.

To be a miner, a node must have both of the global data structures synced (the Merkle Tree of Notes and the Merkle Tree of Nullifiers), and know at least the two most recent blocks.

Block Creation

As we’ve mentioned, a block consists of a block header and a block body. The block body is simply a list of 0 or more transactions; a block containing no transactions is called an empty block. The block creation process is the same regardless of whether or not a block has transactions:

1. Determine the block body
2. Set the difficulty and target
3. Include the miner reward based on the coin emission schedule
4. Construct the block header

Determine the Block Body

The transactions in the block body have been broadcasted by other peers who want their transactions to be added into the blockchain. To incentivize a miner to include such a pending transaction into the block body, transactions include a publicly visible transaction fee that goes to the miner.

A block with an invalid transaction will be rejected by other nodes — so before including it in the block body, a miner should first verify that transaction (more on transaction verification in the Transaction Creation section).

Set the Difficulty and Target for a Block

Difficulty

The target time for an Bitcoin Inu block is currently set to 60 seconds. This is subject to change.

The purpose of the difficulty is simple. It is adjusted, if needed, at every block to make it harder or easier for miners to produce blocks such that new blocks are added to the blockchain every 55 to 65 seconds (with an average of 60 seconds). If the network (e.g. all the nodes in the network) has not produced a block in over 65 seconds, the difficulty for the upcoming block is decreased (in comparison to the previous block’s difficulty). Conversely, if a miner wishes to produce a block in under 55 seconds, the difficulty for a block with that timestamp would be greater than that of the previous block.

The Bitcoin Inu difficulty calculation is largely influenced by Ethereum’s difficulty calculation as described in EIP-2, with a few differences.

To determine difficulty for an upcoming block, we first calculate the time “bucket” that the block belongs to. A time bucket is defined as how far away (in intervals of 10 seconds) the block’s timestamp is away from the desired range of 55 to 65 seconds after the previous block. An upcoming block that is 45-55 seconds after the previous block would have a time bucket value of -1, a block that is 35-45 seconds after the previous block would have a time bucket value of -2, and so on:

Time (in seconds) after previous block	bucket
0-5	-6
5-15	-5
15-25	-4
25-35	-3
35-45	-2
45-55	-1
55-65	0
65-75	1
75-85	2
85-95	3
... and so on (max value capped at 99)

We use the time bucket to then adjust difficulty for the upcoming block relative to the difficulty of the last block. The pseudocode for calculating difficulty is as follows:

const diffInSeconds =

(time.getTime() - previousBlockTimestamp.getTime()) / 1000;

const difficulty =

previousBlockDifficulty -

(previousBlockDifficulty / BigInt(2048)) * BigInt(bucket);

return BigIntUtils.max(difficulty, Target.minDifficulty());

Currently, Target.minDifficulty() is 131072, but this is subject to change.

Target

We’ve discussed adjusting difficulty to ensure 55-65 seconds between blocks — we do this by adjusting a target, which is a number that the block hash needs to fall under (e.g. be numerically less than the target).

The target is calculated from the difficulty given this formula: target = 2**256 / difficulty

As covered in the previous section, it has an inverse relationship with difficulty: as difficulty increases, the target decreases, and vice versa. This is because as the target decreases it becomes statistically harder to find that random number such that the hash of the block header is less than the target. Conversely, as the range of acceptable hashes decreases, difficulty increases.

Include the Miner Reward Based on Coin Emission Schedule

The mining reward (how many coins a miner is allocated for successfully mining a block) is tied to the Bitcoin Inu emission curve. The idea behind the Bitcoin Inu emission curve is that after the first year post mainnet launch, the total coin supply is increased by a fourth of the genesis block value (due to block rewards). Subsequent years will have fewer and fewer newly minted coins according to a decay function, but never fully reaching 0.

The formula to determine how many new coins will be minted for a particular year after launch is:

$g (x) = \frac s 4 \cdotp e^{k \cdotp floor(x)}$

Where s is the initial supply of the genesis block of 42 million coins, k is the decay factor of -.05, and x is the year after mainnet launch (starting from 0).

The Bitcoin Inu “year” in block count is 525,600 blocks to one calendar year (assuming 60 second block times). We use the above formula to calculate the block reward using the Bitcoin Inu "year", rounded to the nearest .125 of a coin:

$blockReward = mRound(\frac{\frac s 4 \cdotp e^{k \cdotp floor(x)}} {525,600}, 0.125)$

Therefore the block reward and total supply for the first few years after launch would be:

Years after launch	Block reward (60s block times)	Total supply
0	0	42,000,000.00
0-1	20	52,512,000.00
1-2	19	62,498,400.00
2-3	18.125	72,024,900.00

The emissions curve using the above mentioned block reward formula, with a cap of 256,970,400 coins for total supply, would look like this:

To claim the block reward for successfully mining a new block, the miner constructs a special miner fee transaction in the block header. The value of the miner fee transaction is publicly visible so that others can verify that it is exactly the block reward plus all the transaction fees from the transactions included in that block. The recipient’s address for that miner fee transaction remains hidden. Learn more about the miner reward in the Transaction Creation section.

Construct the Block Header

After determining the block body, the miner can then construct the block header for it.

A Block Header consists of the following data:

sequence	The sequence is constructed using the latest block’s sequence number and incrementing it by one. This field indicates the position of that block in the blockchain, starting from zero.
previousBlockHash	The previousBlockHash is filled out using the hash of the latest block in the blockchain, per the Bitcoin Inu hashing algorithm. This indicates that this new block is building off of the latest known block in the blockchain.
noteCommitment	All the new notes included in the block body are applied (in order) to the Merkle Tree of Notes. The resulting new Merkle root for that tree and its size (in terms of the global number of notes) are used to build the noteCommitment for the block header.
nullifierCommitment	The same process is followed, but with the nullifiers revealed, to build the nullifierCommitment for the block header.
target	The target is determined by the difficulty and target algorithm.
timestamp	The timestamp is when that block is mined. The timestamp of the current block must be greater than the previous block’s timestamp, and can be up to 60 seconds into the future to mitigate for different clocks for whoever is verifying the block in real time.
minersFee	The minersFee is a special transaction to award the block reward to any address of the miner’s choosing. The value of this block reward transaction is known and can be verified, but the recipient’s address is hidden. For more details, see how the block reward transaction is created (link to Miner Reward Transaction section in Transaction Creation).
randomness	The randomness is a 64-bit number such that when all the contents of the block header are hashed using the Bitcoin Inu hashing algorithm the result is numerically less than the target.

Bitcoin Inu Hashing Algorithm

The specifics of the Hashing Algorithm will be announced closer to launch date.