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How do you mine bitcoin?

The entire bitcoin blockchain, for all the transactions it moves around, relies on bitcoin miners to keep the network humming away. Especially with the recent blocksize debate, the role of miners has come to the fore. Regardless of what people using the network think, miners at the end of the day will decide on which way things go. So we thought we’d put together a piece looking at bitcoin mining in it’s various forms over the years, and what the situation is like today. Firstly, you’re probably thinking while reading this article, I have a computer, can’t I just mine

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The entire bitcoin blockchain, for all the transactions it moves around, relies on bitcoin miners to keep the network humming away. Especially with the recent blocksize debate, the role of miners has come to the fore. Regardless of what people using the network think, miners at the end of the day will decide on which way things go.

So we thought we’d put together a piece looking at bitcoin mining in it’s various forms over the years, and what the situation is like today. Firstly, you’re probably thinking while reading this article, I have a computer, can’t I just mine on this? Back in 2009, yes you could. These days, no. And here’s the damage it can do to your equipment. Bitcoin mining works on an algorithm that takes into account the SHA256 hash, some information relating to block height, and a difficulty. Doing one hash by hand is shown here, and is time consuming.

Things started on PC’s, with CPU’s doing the calculations As more people came into the network, these kilohashes quickly became less profitable. People moved onto using GPU’s (particular ATI cards over Nvidia cards), as these could do megahashes. However, as the arms race continued, FPGA devices came on the scene. By basically 2012, these were then obsolete.

The first ASIC hardware came on the scene, which revolutionised bitcoin mining. At the start, individual miners upgraded to equipment like the Antminer’s we use in our review rig, which could pump out gigahashes of processing power. Once these came on the network, any non-ASIC mining effectively became worthless. Some hardware suppliers also began running their own mining pools, while hardware moved up towards terrahashes in processing power, and very shortly after larger scale groups of miners came on the scene with data centres full of mining hardware with petahashes of processing power.

So at this stage, if you are looking to mine bitcoin you have a couple of options. You can solo mine, in the off chance that you may hit the jackpot, and win the block finding reward and transaction fees. A lot of hobbyists do this, to either run a node and keep the network decentralised, or via some of the solo mining pool options that are out there. Larger datacentres can also mine this way, putting large amounts of processing power into the attempt to solve the bitcoin algorithm.

Most of the bitcoin mining scene though has centralised across a number of bitcoin mining pools, and you can find the stats on which pools are finding blocks at a given time by checking over at blockchain. These pools allow you to sign up, point your processing power to them, and pay on a proportional basis to the power you contribute, paying per share, or other variations of the payout stucture. Here you will not get a full block reward, but a section of the overall earnings each time everyone finds a block between them.

So what’s involved with being a miner? There are three main components that go into bitcoin mining. Firstly, you’ll need hardware. The more efficient equipment is quite expensive (ie several thousand or hundred euro per piece of hardware) plus a power unit to power it, and your fixed processing power will always go down as a proportion of the network over time, which means earnings will also drop over time. Once bought, these will need power, internet connection, and a place for them to run. Often they’ll pump out a fair bit of heat, so removing this heat may be a factor wherever you are based. In a clean datacentre, equipment will stay clean, but in a home environment, it will clog up with dust and dirt from the air, so maintenance needs to be factored in.

In Ireland, with our electricity prices, it is nearly impossible to make a return on investment on new hardware, and even second hand hardware, letting the original purchaser take the depreciation hit, you can make some bitcoin, but it will cost you more to make the bitcoin than if you were to say purchase it from a bitcoin atm or a bitcoin exchange.

With that, you may think of one of the many cloud mining providers. Here, they offer fixed amounts of hashing power for various length contracts, which will then pay out the resulting bitcoin over time. We’ve always been wary of these providers on the site, as doing the maths, it’s nearly impossible to make a return of break even.

So in conclusion, if you’re getting into bitcoin these days to mine, you’ve missed the boat in terms of having a realistic chance to make money. If you’re investing in new hardware, you can certainly get a chunk of bitcoin, but it’s value is dependent on the fluctuating price of bitcoin. If you’re cloud mining, you’re paying someone else’s hardware costs, and will probably make an even bigger proportional loss, despite not having the capital requirements. But if you want to learn about the blockchain and bitcoin mining, you can often pick up secondhand equipment on sites like adverts. Depending on how you set these up (ie we’ve undervolted our review rig), you might be able to break even for a while, and have a bit of fun with the hardware and configuration. But if you’re looking to just get your hands on bitcoin, buying it will always be the most cost effective way.

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Source: https://bitcoinsinireland.com/how-do-you-mine-bitcoin/

Blockchain

Bitcoin Price to $1 Million in 10 Years ‘Very Reasonable’ Says Kraken CEO

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With bitcoin currently enjoying a near 70% YTD increase, bullish predictions see the asset topping into a six or even seven-digit territory in the following decade. These projections came recently from Kraken’s CEO, Jesse Powell, and the Managing Director of Magnetic, William Quigley.

Bitcoin to $150K in the Next Year

Founded in 2010, Magnetic is an investment firm with a pro-cryptocurrency approach, having allocated funds in the industry as well. In a CNN appearance, the company’s Managing Director and Co-Founder, William Quigley, spoke about bitcoin’s future, price performance, and the impact of the COVID-19-induced financial crisis on the asset.

By referring to historical price developments after each halving, the executive forecasted a somewhat bullish projection that can take the cryptocurrency up to $150,000 in the following months.

“We are about half-way through the post-halving bull run, so, by my judgment, we have a lot more to go with bitcoin. Certainly – $100,000 and quite possible $150,000 by the end of this year or maybe Q1 next year.”

Quigley also touched upon the growing number of companies putting BTC on their balance sheet, which he classified as “huge.” He believes that the general narrative for corporations to allocate some of their trillions of dollars currently held in cash in government bonds is fading. Instead, they will continue to look for an asset with a finite supply, namely bitcoin.

He noted that the most critical issues for corporations are inflation and the diminishing of the dollar. In contrast, being a limited-supply type of asset, BTC could serve as a hedge with its decreasing inflation.

BTC to $1M, Says Kraken CEO

In another widely-bullish prediction, Jesse Powell, the CEO of the US veteran crypto exchange Kraken, said that the asset price is going to “infinity.”

When asked to specify in dollar terms what that amount would represent, Powell said that even reaching $1 million per bitcoin sounds “reasonable.”

“People that are believers in bitcoin see it’s going to replace all of the world fiat currencies, so that means basically whatever the market cap of the dollar is, the euro, all of that combined is what bitcoin could be worth.

In the near time, people see it surpassing gold as a store of value. So, a million dollars as a price target within the next ten years is very reasonable.”

He justified his quite optimistic prediction with the excessive amounts of fiat currencies printed by the US and other global superpowers following the COVID-19 pandemic. Additionally, Powell believes that the younger generations are keen to adopt the primary cryptocurrency, which could skyrocket its price.

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Source: https://cryptopotato.com/bitcoin-price-to-1-million-in-10-years-very-reasonable-says-kraken-ceo/

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Blockchain

First Major Rug Pull on Binance Smart Chain? Over $30 Million Drained

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  • Binance Smart Chain has become somewhat of a hot topic amid DeFi gem seekers in the past few weeks.
  • The network saw an influx of new projects, reminiscing of the early days of the DeFi craziness last summer.
  • In any case, hours ago, the community was shocked earlier today when news broke out that one of the newer protocols, Meerkat Finance, was drained.
  • Meerkat Finance is a yield farming protocol that runs on Binance Smart Chain, and a few hours ago, the team revealed that it was “hacked” and drained by 73,000 BNB and 13 million BUSD. The total number amounts to roughly over $30 million at the time of this writing.
  • It appears that the alleged hacker stole the money by changing the protocol’s smart contract using the original deployer’s account. In other words – the private key of the deployer contract must have been compromised.
  • The Twitter account of the project, as well as the website, have also been taken down, causing some to believe that the team rug pulled the entire thing.
  • Meanwhile, the official account of Binance prompted the community to provide any additional information they may have on the case.
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Source: https://cryptopotato.com/first-major-rug-pull-on-binance-smart-chain-over-30-million-drained/

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Parity To Educate Berkeley Students on Developing Blockchain Projects on Polkadot

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The popular DLT protocol Parity Technologies has partnered with Berkeley’s Blockchain Xcelerator program to provide educational panels for students in the university’s blockchain curriculum.

As part of the collaboration, Polkadot’s co-founder Gavin Woods will be a guest lecturer in the A. Richard Newton Distinguished Innovator Lecture Series.

Parity to Educate Berkeley Students About Blockchain

Parity Technologies, a core DLT infrastructure company, announced its latest partnership in a press release shared with CryptoPotato.

According to the document, Parity will employ its substrate blockchain-building framework to educate and work together with the university to raise “the overall awareness of next-generation blockchain technologies in order to promote adoption among students and the community at UC Berkeley.”

For the ongoing 2020-2021 academic year, Parity’s developer education team will collaborate with the faculty, students, and the community studying blockchain technologies in their respective coursework. This includes involvement in curriculum preparation, project ideas, and resources to “enrich the educational experience.”

Furthermore, Parity and the university’s DLT-oriented program called the Berkeley Blockchain Xcelerator will advise students and entrepreneurs on how to develop and eventually launch blockchain startups on Polkadot and Web 3.0 ecosystem.

Jocelyn Weber, an executive at the Berkeley Blockchain Xcelerator, said that the “work with parity and other Polkadot ecosystem startups had demonstrated the potential of this technology in educating our community.”

“We strive to expose our students to the tools and skills they will need to enter this space and immediately start making significant contributions – which is why improving their knowledge with tools such as Substrate and networks like Polkadot will be an important part of our curriculum development.” – Weber added.

Gavin Woods to Give a Lecture

The statement also outlined that Dr. Gavin Woods, the co-founder of Ethereum, Polkadot, and Parity, will give a lecture in the A. Richard Newton Distinguished Innovator Lecture series this month.

Wood commented that blockchain innovation is expanding at a rapid pace and has advanced “beyond legacy networks into next-generation, production-grade blockchains like Polkadot.” This makes it “critical” for the newer coders, engineers, and entrepreneurs to be able to take on the growing competition and develop ground-breaking projects.

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Source: https://cryptopotato.com/parity-to-educate-berkeley-students-on-developing-blockchain-projects-on-polkadot/

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