Bitcoin mining graphics card wiki

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Digital information can be reproduced relatively easily, so with Bitcoin and other digital currencies, there is a risk that a spender can make a copy of their bitcoin and send it to another party while still holding onto the original. With as many as , purchases and sales occurring in a single day, verifying each of those transactions can be a lot of work for miners. The amount of new bitcoin released with each mined block is called the "block reward. In , it was In , it was 25, in it was Bitcoin successfully halved its mining reward—from This system will continue until around These fees ensure that miners still have the incentive to mine and keep the network going.

The idea is that competition for these fees will cause them to remain low after halvings are finished. These halvings reduce the rate at which new coins are created and, thus, lower the available supply. This can cause some implications for investors, as other assets with low supply—like gold—can have high demand and push prices higher.

At this rate of halving, the total number of bitcoin in circulation will reach a limit of 21 million, making the currency entirely finite and potentially more valuable over time. In order for bitcoin miners to actually earn bitcoin from verifying transactions, two things have to occur. First, they must verify one megabyte MB worth of transactions, which can theoretically be as small as one transaction but are more often several thousand, depending on how much data each transaction stores.

Second, in order to add a block of transactions to the blockchain, miners must solve a complex computational math problem, also called a "proof of work. In other words, it's a gamble. The difficulty level of the most recent block as of August is more than 16 trillion. That is, the chance of a computer producing a hash below the target is 1 in 16 trillion.

To put that in perspective, you are about 44, times more likely to win the Powerball jackpot with a single lottery ticket than you are to pick the correct hash on a single try. Fortunately, mining computer systems spit out many hash possibilities. Nonetheless, mining for bitcoin requires massive amounts of energy and sophisticated computing operations. The difficulty level is adjusted every blocks, or roughly every 2 weeks, with the goal of keeping rates of mining constant.

The opposite is also true. If computational power is taken off of the network, the difficulty adjusts downward to make mining easier. Say I tell three friends that I'm thinking of a number between 1 and , and I write that number on a piece of paper and seal it in an envelope. My friends don't have to guess the exact number, they just have to be the first person to guess any number that is less than or equal to the number I am thinking of.

And there is no limit to how many guesses they get. Let's say I'm thinking of the number There is no 'extra credit' for Friend B, even though B's answer was closer to the target answer of Now imagine that I pose the 'guess what number I'm thinking of' question, but I'm not asking just three friends, and I'm not thinking of a number between 1 and Rather, I'm asking millions of would-be miners and I'm thinking of a digit hexadecimal number.

Now you see that it's going to be extremely hard to guess the right answer. Not only do bitcoin miners have to come up with the right hash, but they also have to be the first to do it. Because bitcoin mining is essentially guesswork, arriving at the right answer before another miner has almost everything to do with how fast your computer can produce hashes.

Just a decade ago, bitcoin mining could be performed competitively on normal desktop computers. Over time, however, miners realized that graphics cards commonly used for video games were more effective and they began to dominate the game. In , bitcoin miners started to use computers designed specifically for mining cryptocurrency as efficiently as possible, called Application-Specific Integrated Circuits ASIC.

These can run from several hundred dollars to tens of thousands but their efficiency in mining Bitcoin is superior. Today, bitcoin mining is so competitive that it can only be done profitably with the most up-to-date ASICs.

Even with the newest unit at your disposal, one computer is rarely enough to compete with what miners call "mining pools. A mining pool is a group of miners who combine their computing power and split the mined bitcoin between participants. A disproportionately large number of blocks are mined by pools rather than by individual miners. Mining pools and companies have represented large percentages of bitcoin's computing power.

Consumers tend to trust printed currencies. In addition to a host of other responsibilities, the Federal Reserve regulates the production of new money, and the federal government prosecutes the use of counterfeit currency. Even digital payments using the U. When you make an online purchase using your debit or credit card, for example, that transaction is processed by a payment processing company such as Mastercard or Visa.

In addition to recording your transaction history, those companies verify that transactions are not fraudulent, which is one reason your debit or credit card may be suspended while traveling. Bitcoin, on the other hand, is not regulated by a central authority. Nodes store information about prior transactions and help to verify their authenticity. Unlike those central authorities, however, bitcoin nodes are spread out across the world and record transaction data in a public list that can be accessed by anyone.

Between 1 in 16 trillion odds, scaling difficulty levels, and the massive network of users verifying transactions, one block of transactions is verified roughly every 10 minutes. The bitcoin network is currently processing just under four transactions per second as of August , with transactions being logged in the blockchain every 10 minutes. At that point, waiting times for transactions will begin and continue to get longer, unless a change is made to the bitcoin protocol.

There have been two major solutions proposed to address the scaling problem. Developers have suggested either 1 creating a secondary "off-chain" layer to Bitcoin that would allow for faster transactions that can be verified by the blockchain later, or 2 increasing the number of transactions that each block can store. With less data to verify per block, the Solution 1 would make transactions faster and cheaper for miners. Solution 2 would deal with scaling by allowing for more information to be processed every 10 minutes by increasing block size.

The program that miners voted to add to the bitcoin protocol is called a segregated witness , or SegWit. Less than a month later in August , a group of miners and developers initiated a hard fork , leaving the bitcoin network to create a new currency using the same codebase as bitcoin. Although this group agreed with the need for a solution to scaling, they worried that adopting segregated witness technology would not fully address the scaling problem.

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Instead, they went with Solution 2. Bitcoin Block Half. Board of Governors of the Federal Reserve System. Mining farm — is a data center , technically equipped to mine bitcoins or other cryptocurrencies. They were emerged as a result of the constant complication of the process, which requires more technical, energy and financial resources. Farms allow the productivity of computers and, consequently, the Hash Rate to be maximized. Physically, farms are rooms with a large number of computers and servers that take on tasks for mining.

There are also home-mining farms.

They differ from ordinary PCs, by being specially assempled and designed for mining. Home farms can bring profitability, but users often face the problem of excessive electricity consumption and overheating of the computer at home which makes mining unprofitable. One of the main resources into which a miner has to invest is electricity. In addition, a large number of processors require an appropriate cooling and ventilation system.

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Cloud mining is a process of obtaining Bitcoins with the use of a remote data processing center with the general computational power. This allows the users to mine Bitcoins or alternative crypto currencies without controlling the equipment directly. Another option is a private virtual service, where a user installs the mining software. Finally, a user may take the computational powers themselves by using already the results of their work and not coming in touch with physical or virtual servers.

Web-mining, or "hidden mining" — is an alternative method of cryptocurrency mining through the web browsers of users of websites. In fact, owners of Internet resources can convert the capacities of visitors' computers into cryptocurrency. This method is conducted by special web-miners - programs that can work when the user's browser is switched on or runs in the background. Technically, such a program can be started on the computer with a line of JavaScript code written on the page, or the code itself is embedded into the browser extension. There are also viruses that make computer capacities work for cryptocurrency mining.

Profitability of mining is the level of reward that a user of the blockchain network receives providing of his technical capacities for verifying transactions and solution of network tasks, resulting in a new data block on the network. The profitability depends on two related factors. The first one consists in the complexity of the process itself, on which the reward depends the more difficult the process is, the smaller amounts of tasks can be made per technical resource unit and, consequently, the less reward you will receive.

The second factor is the cost of bitcoin or other crypto currency. That is, how much your reward is in terms of fiat currencies.

Mining - Bitcoin Wiki

However, this indicator does not take into account additional investments: rental of premises, management of farms and energy costs. Specifically for Bitcoin, the number of mining types has significantly decreased. If other cryptocurrencies can still be mined using video cards, processors, hard drives, etc. A central processing unit or CPU is an integrated circuit that is an essential part of the hardware of a personal computer or any other equipment.

Currently, any modern, high-performance computer is equipped with a powerful central processor with a high frequency of operation and several cores. Accordingly, if a miner has a good personal computer, then he will not have to invest hundreds or thousands of dollars in equipment. Mining on a video card is the process of mining cryptocurrency using graphic processors GPUs. To do this, user needs a powerful video card in his home computer or a specially assembled farm of several devices in one system.

If miner is interested in why GPUs are used for this process, then the answer is very simple.

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The thing is that video cards are initially developed to process a large amount of data by performing the same operations, as is the case with video processing. The same picture is observed in cryptocurrency mining, because here the hashing process is just the same. The microcircuit is a semiconductor. Used in cases where the device is designed to perform logical operations, such as and, or, nand and others. An application-specific integrated circuit, or ASIC , is just a chip designed solely for one type of work — decryption of a specific algorithm.

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