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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

Elon Musk’s latest Dogecoin ‘trolling’ isn’t impressing the crypto community

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Tesla and SpaceX CEO Elon Musk argued on Twitter today that Dogecoin (DOGE) can beat Bitcoin (BTC) “hands down,” with just one small condition—almost every DOGE’s fundamental aspect needs to change, effectively turning it into a different token altogether.

So no big deal then.

“Ideally, Doge speeds up block time 10X, increases block size 10X & drops fee 100X. Then it wins hands down,” Musk replied to a Twitter user who was arguing that “Elon is choosing $DOGE because Dogecoin is better than Bitcoin in many fundamental ways.”

Judging by the community’s reaction, a lot of users were left feeling unsure whether Musk was “trolling” or not. One commenter pointed out that if Dogecoin’s blockchain would produce 10-megabyte blocks every six seconds, this will make the network vulnerable to spam attacks.

“For those bad at math. 100X higher transaction volume with 100X lower fees means total fees earned stay same. Low fees & high volume are needed to become currency of Earth,” Musk retorted.

When asked why he won’t just make a completely new cryptocurrency that can satisfy these technical requirements, Musk explained that it’s a “big pain in the neck to create another one.” Still, he implied that this is also a possibility, but “only if Doge can’t do it.”

In his turn, Adam Back, CEO of Bitcoin development firm Blockstream, questioned Musk’s blockchain expertise in general.

“That’s not how any of this works, Elon Musk. Would be like someone wading into SpaceX with ideas for a cuboid rocket fueled by water,” Back wrote, adding, “He’s just trolling. And probably hitting a blunt.”

Other users were less lenient, arguing that if “Donald Trump has been banned for ‘being bad’ for people,” there is no reason why Musk “should keep having this privilege.”

In general, many commenters pointed out that for a blockchain network to drastically increase its throughput and scalability, it needs to make compromises in other areas such as security and decentralization. 

“Have you tried making your spaceships 10x lighter, and 10x faster, and also 10x bigger? This would ideally save on energy and efficiency,” another user ironically asked Musk.

In the end, regardless of whether Musk was actually joking or not, his behavior on Twitter—especially when it comes to cryptocurrencies—has been a bit over the top lately, some commenters argued.

“Because [Musk] has millions of newcomer users who may not know the difference. Funny trolling to him = rekt newbs in real-life,” Back concluded.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptoslate.com/elon-musks-latest-dogecoin-trolling-isnt-impressing-the-crypto-community/

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Blockchain

Bitcoin Hashrate of Major Chinese Mining Pools Drops Rapidly

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Bitcoin network’s hashrate recorded a rapid drop today across major Chinese mining pools including f2pool losing 11.26% a spool lost 16.23%, Binancepool recorded a decline of 14.38%, and Huobipool lost 23.68%. The rapid decline is being attributed to another power outage in Sichuan province. Industry insiders claimed the decline might be temporary and might bounce back soon.

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The decline in the mining pool’s hashrate comes days after the Bitcoin network’s mining hash power reached a new ATH. Bitcoin price on the other hand continued to consolidate under $50K. The top cryptocurrency saw a major sell-off a few days ago amid growing inflow on exchanges aided by Elon Musk-led Bitcoin network’s environmental impact FUD.

Bitcoin has been in a consolidation phase for over a month now after reaching a new ATH of $64,837, it recorded a sharp correction soon after falling over 20%. The recent sell-off was attributed to several factors including declining institutional interest.

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Will Bitcoin Price Suffer?

A similar power outage in China last month saw the Bitcoin mining hash rate drop by over 25% leading to another major market sell-off. The last hashpower fud was also marred into a lot of controversies as many claimed different reasons for the power outage and the amount of hash power decline.

Bitcoin price is currently trading just under the $49K mark with a 2% decline over the past 24 hours. With every major sell-off in the market, many have called it a short-term price top, but on most occasions, bitcoin has defied the odds to bounce back to new ATHs. On the other hand, Bitcoin adoption has continued to flourish as many public companies have announced Bitcoin purchases over the past month. Apart from Bitcoin, manor altcoins including ethereum, Litecoin have also registered a minor decline falling over 5% in the past 24 hours.

To keep track of Crypto updates in real time, Follow us on Twitter & Telegram.

Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://coingape.com/bitcoin-hashrate-major-chinese-mining-pools-drops-rapidly/

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Blockchain

Coinbase finally releases a timeline for listing Dogecoin

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Since Coinbase’s direct listing, it released the transcripts of its Q1 Earnings Call. During the call, the company addressed its plans of listing Dogecoin (DOGE), thanks to its ever-rising demand.

Coinbase‘s CEO Brian Armstrong talked about the exchange’s plans for the memecoin. He stated:

“So, to answer your question directly, we plan to list DOGE in the next six to eight weeks. And then more broadly, we’re going to be focused on how we can accelerate asset addition in the future.”

With regard to queries on what parameters were used to qualify various coins or tokens to add to the exchange and why there weren’t more choices? Armstrong stated:

I think there’s going to be millions of different crypto assets out there, especially as we see new assets being created for new companies being created and there’s even NFT’s and individuals who are tokenizing their time and so in a world where there’s going to be millions and millions of these crypto assets out there, we get this question a lot, how are you deciding, which ones to add, and how can you accelerate it?

Without directly alluding to XRP, the digital asset that has been entangled in a legal battle with the SEC, Coinbase CEO also stated that Coinbase had worked with CRC to create a regulatory framework for coins. He added:

So, today, we use a number of factors, we look at cybersecurity around the coin to make sure that there’s not going to be an issue that would cause customer loss. We also look at it from a legal point of view and a compliance point of view. There’s various concerns out there about securities, for instance, and we’ve worked with things like the Crypto Rating Council to help create clear regulatory frameworks for this.

Data from ICO Analytics stated that the total web traffic for crypto exchanges had increased by 43% over the past month.


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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://ambcrypto.com/coinbase-finally-releases-a-timeline-for-listing-dogecoin

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