I mine for Bitcoin. I show what I run under the hood and what others who mine Bitcoin are up to. I'm also on Twitter, follow @BitcoinMiner
Got something to add? Feel free to submit a post of your own.
Bitcoin, 100% Pure w/No Tungsten - Miners Make Sure Of It
Questions asked about Bitcoin mining often come from those wanting to know, in general, “What is the purpose? Why is it necessary to have all these computers crunching away?”.
This can be answered with the help of the photo above. What occurred there, allegedly, is what might be called a “double spend” attack. The photo shows metal tungsten used as a substitute for the vastly more expensive gold. In this instance, the value for a 1000g bar of gold was exchanged, but some amount — between 30% to 40% of that gold expected to be inside was during that time instead held elsewhere. It was held in the hands of the perpetrator of the crime.
That’s what is meant by the term “double spend”.
More commonly the words that describe this are “counterfeit” and “fake” but the intention of the perpetrator is the same — to deceive the buyer in order to acquire money through fraudulent means.
At a high level, the Bitcoin mining network exists to ensure that Bitcoin’s networked accounting ledger, a type of transaction register database known as a blockchain contains no Bitcoin funds that have been double spent.
For most accounting and banking systems, this is a trivial function. There is normally a database holding the master records which acts as the authority on the amount any account has available to withdraw or spend.
Bitcoin differs in that there is no “master record”.
The “authority” for Bitcoin comes from whatever exists in the latest transaction register (blockchain). That transaction register blockchain is built by the miners. The mining activity ensures that transactions being placed into the blockchain follow the rules of the Bitcoin protocol.
The reason lots of mining is needed is so that an individual or group attempting to do the equivalent of stuffing tungsten into the drilled holes is not successful in defrauding anyone.
The end result is that every Bitcoin node stores a copy of this trusted transaction register blockchain and can easily verify that each bitcoin used in a transaction has not previously been spent. Free, open source software (FOSS) software is what enables double spend protection for Bitcoin. It means Bitcoin is a much less costly system than one that requires a GE Phaser XS for protection.
FPGA - The Game Changer
There could be a new sheriff coming to town. Various FPGA miner board designs are getting shipped and the metrics promised are real. With performance measured in terms of megahashes per Joule (Mhash/J), FPGAs mine in the range of 20 Mhash/J whereas the most efficient GPUs mine at just a bit over 2 Mhash/J.
Mining operators that are in areas with high electric rates are likely to be the most interested in these new boards since mining with GPUs is barely above break-even levels for many of them currently. Other miners, particularly those mining from their residences, would like to expand their mining endeavors but are constrained to maximum current levels available from the electrical circuit that reaches where the mining hardware can be located. Adding a single FPGA board could double the typical hobbyist-level mining operator’s capacity but would increase power consumption by just 10%.
The photo for this post shows boards getting tested, presumably before being shipped out to customers.
While FPGA mining technology has now reached the “now shipping in limited quantities” state the buyers will still primarily consist of the bleeding-edge adopters. What isn’t known is how long these custom designs will survive while hashing 24/7 in varying environs. It isn’t known if there are designs from other sources coming that bring even greater performance. An ASIC design could be dramatically even more efficient and if announced could be a major blow to these fledgling FPGA technologies
What does appear to be happening though is that these FPGA designs are the writing on the wall for the power hungry GPU (as far as being used for Bitcoin mining). Those miners considering further investment in GPU hardware might want to keep a close eye on these FGPA developments.
There was a similar disruptive event in Bitcoin’s history in the second half of 2010 when the transformation from CPU mining to GPU mining took only a matter of months. The difference though was that the mining community was relatively tiny then and many techies already had GPUs for gaming purposes or could order additional GPUs from Amazon and NewEgg, for instance.
A GPU glut could result now though. At least one large mining operation liquidated its equipment recently though it took only a few days for a single buyer to emerge to buy the entire lot. The resale value for used GPUs is still healthy, particularly for those GPUs that have value in mining. If these GPUs become unprofitable for mining even then demand could collapse causing a significant price drop.
With less than two million of the easy bitcoins (issued 50 at a time, about 7,200 BTC per day) remaining, GPU miners barely pushing break-even levels today might want to reassess their plans for the rest of 2012. The landscape is likely to change.
Anonymous asked: How many Bitcoin miners are out there? Would you have any links showing me where I can get this info?Thanks
Because most miners use pools and most pools are private, independent and competing organizations, that data is not shared publicly.
As miners run their own nodes and there are about 20K nodes nowadays (seen another way in this visual) we know the total number of miners is below this. With mining remaining very competitive, those who were marginal miners are getting squeezed out so the total number of miners is becoming fewer over time.
Any number thrown out there, like 5,000, for instance, would just be a wild-assed guess. For every multi-ghash/s mining farm are dozens to hundreds of gamers and others with marginal GPUs (at least as far as their mining performance) earning just a few bitcents each day.
Eighty Percent Of All ‘Easy’ Bitcoins Now Mined
Currently with each block mined the reward to the miners is 50 BTC of new currency issued. When issuance reaches the 10.5 million BTC milestone, the rate will drop from 50 BTC to 25 BTC per block. Hitting the 8.4 million mark today means that 80% of these “easy” bitcoins have now been mined.
The 10.5 million mark will likely occur around December of this year, but could deviate based on the rate of change in mining capacity with the target being hit in November or January instead being a possibility. At that point, exactly half (50%) of all bitcoins that will ever be issued will have been issued.
Miners considering starting up or adding capacity at this point are faced with some long-term challenges. There is now competition from those using FPGAs, miners are faced with a flat or declining exchange rate for the bitcoins they produce, and they face this upcoming 50 to 25 BTC drop in the block reward.
There is uncertainty if this drop is already factored into today’s price, or if investors have not yet realized that soon the rate of currency inflation will suddenly drop by half.
In the short term even, the mining profitability currently is only about half as high as it was just a month ago thanks to a steadily increasing mining difficulty.
The 25 BTC per-block reward level, once reached, will continue for four years when again that level too will drop by half, to 12.5 BTC per-block.
Garage Miner, 3 ghash/sec
A post on Reddit from a miner includes the photo to a rack holding five rigs and some first-hand accounts from the rig owner, Never2bFound06.
The spec for each rig include 2 X ATI Radeon HD 5850s. Including another rig (a personal desktop w/ a 6990) the mining operation produces about 3 ghash/s.
For Sale: 25 Rigs (3 X HD 6990 each) + 29 loose 6990s
A ready-to-run mining operation consisting of 25 rigs is being offered for sale, according to this offer listed on Ogrr. The seller wishes to sell to a single buyer but will consider offers for $25K USD or more of equipment.
Alternatively, the seller is willing to consider a revenue-share partnership where a miner with cheap electricity manages the equipment in exchange for a share of the revenues.
Each of these 3 X 6990 rigs performs about 2,100 ghash/s, according to the seller.
There, I Fixed It! Redneck Rig Repairs
BitcoinTalk forum member P4Man shows how to get a few more hours of use from your GPU before shipping it back for warranty repair.
![Genjix Descibes The “Work” That Bitcoin Mining Performs
A post by Amir Taaki (genjix) on Bitcoin Media (@BitcoinMedia) describes how and why bitcoin mining performs “work”. Excerpts:
Another property of a good hash function is small changes in input lead to large changes in output. This makes it difficult (practically impossible) to reverse a hash function.
A bitcoin miner is constantly hashing a block to see if it passes the above check. If not then it slightly modifies the block and tries again. It keeps doing this until it finds a block that passes. A valid block has been found, and the miner will broadcast this block to the network.
A miner’s task is to make a block and keep modifying that block so that it produces a different hash, until that hash passes a [specific] test.
Creating a block is not easy. It takes computational processor cycles. Ergo it takes electricity. Ergo it costs money. Creating a block usually has miniscule profit or even negative expected value. As more people mine and create blocks, the network drives up the difficulty squeezing out all the profit.
Previous Posts](http://25.media.tumblr.com/tumblr_lyc98vV4s41qfy0bho1_250.png)
Genjix Descibes The “Work” That Bitcoin Mining Performs
A post by Amir Taaki (genjix) on Bitcoin Media (@BitcoinMedia) describes how and why bitcoin mining performs “work”. Excerpts:
Another property of a good hash function is small changes in input lead to large changes in output. This makes it difficult (practically impossible) to reverse a hash function.
A bitcoin miner is constantly hashing a block to see if it passes the above check. If not then it slightly modifies the block and tries again. It keeps doing this until it finds a block that passes. A valid block has been found, and the miner will broadcast this block to the network.
A miner’s task is to make a block and keep modifying that block so that it produces a different hash, until that hash passes a [specific] test.
Creating a block is not easy. It takes computational processor cycles. Ergo it takes electricity. Ergo it costs money. Creating a block usually has miniscule profit or even negative expected value. As more people mine and create blocks, the network drives up the difficulty squeezing out all the profit.
This guide by Zulius (@_zulius_) shows how to build a dedicated/headless/automated GPU Bitcoin mining rig running the Linuxcoin operating system and Smartcoin miner management.
Evidence Of Confidence Restored
Just weeks after many miners were liquidating their GPU-laden rigs the rise in the exchange rates have given other miners the motivation to add capacity. This photo was found in a post in the Mining Hardware forum on BitcoinTalk.org.
