Tag Archives: Bitcoin

28 Feb

The Difficulty Of Bitcoin Mining Explained

bitcoin-wall

The difficulty of mining process grows as more effort is spent on mining and more bounty hunters join the race. Initially, having a home PC was enough to plunge in Bitcoin mining, then savvy mining gurus moved to utilizing the computing power generated by top gaming graphics cards, but finally the niche has was occupied by digital miners – the devices designed for mining purposes exclusively. At first miners were produced basing on reprogrammed chips, but not so long after application the units based on specific integrated circuits, ASICs, characterized by stunning performance and relatively low power consumption hit the shelves.

For example, the power of a single graphics card Radeon HD 7990 (Nvidia’s solutions are mainly not suitable for mining) equals 1.2 GHs per second at a few hundred watts of energy consumption, while a modern ASIC device, e.g. System Red Fury priced at $125 generates 2.5GHs per second and consumes as little as 2.5 watts. Modern mining implies using ASIC devices, otherwise the affair is commercially unprofitable. Alternatively, one can purchase the necessary amount of GHs via special platforms, e.g. CEX.IO.

Once the miner is purchased the operational expenses are overwhelmingly represented by electricity bills in exchange for Bitcoins. The cost of mining a single Bitcoin may vary from $30 to $600, depending on the equipment used and electricity tariffs. In 2011, buying a top gaming card for mining paid off in about two weeks, but with the growing complexity of the calculation to produce Bitcoins the method is almost useless.

bitcoinMining pool concept

Therefore, miners began to gather in the pools that combine several tens, hundreds or thousands of miners in a single unit: in the case the unit is discovered and mined its share is distributed in accordance with the size of the contribution to the common cause. The system perceives the pool as a miner, producing hundreds of GHs per second, but in practice it is a main server, distributing tasks to miners included in its pool. Unlike solo mining, pool mining generates cash pretty quickly, but in relatively small portions.

In recent months, the media began to cover more and more stories about the unique Bitcoin farms, the largest of which are located in Hong Kong. November, 25 was the launch date of the factory with hardware cooled with liquid cooling, the capacity of which amounted to 4% of the total power in the network or 35 THs per second. It produces about 26 Bitcoins per day, which at the time of writing is equal to tens of thousands of dollars. In April 2013, Kaspersky Lab reported the discovery of a trojan that secretly turns users’ computers in Bitcoin generators.